Volume of KP foreign loans increases as rupee falls against US dollar

PESHAWAR: Because of a constant depreciation of rupee against US dollar, the volume of Khyber Pakhtunkhwa’s (KP) foreign loans has increased to Rs 454.35 billion. 

During the last six months of the Pakistan Tehreek-e-Insaf (PTI) government in KP, the province took a “record” debt of Rs 95 billion. As of June 2022, the total debt of the province stood at Rs 359.33 billion, which increased by 26% till December 2022. 

According to the sources inside the provincial finance department, the main reason for the increase in the debt is the increase in the value of the dollar. Until June 2022, the value of the dollar was 186 rupees, which increased to Rs 224 in December 2022. 

 According to the finance department’s report on loans, from July 2022 to December 2022, the Asian Development Bank ADB) and the International Development Association (IDB) provided a loan of Rs 35.46 billion in three installments, of which Rs 22.40bn were provided by the Asian Development Bank to the health department on August 22. 

Similarly, a loan of 800.60mn was received from the International Development Association for KP’s Water Resource Development Project, while a loan of Rs 12bn has been received from the ADB for rehabilitation of flood hit areas.

The finance department sources said that the volume of loans has increased due to the increase in the dollar rate. But on the other hand, funds received for various projects under the agreements made at low rates of dollar will also benefit the province.