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Thursday May 30, 2024

Pakistan receives $6.3bn inflows in seven months of current fiscal

Islamabad has now made a fresh request for $1 billion worth of SOF for the next 10 months

By Mehtab Haider
February 24, 2024
This image shows US dollar banknotes. — AFP/File
This image shows US dollar banknotes. — AFP/File

ISLAMABAD: The upcoming government faces the gigantic task of securing $11.3 billion in the remaining five months of the current fiscal year, as the caretaker government failed to raise the foreign reserves despite making top claims.

The caretaker government had suppressed the current account deficit by reducing the import bill.

Pakistan received total inflows of $6.3 billion, in shape of foreign loans, in the first seven months of the current financial year without revival of the Saudi Oil Facility (SOF) in January.

The cash-strapped country exhausted the last SOF facility of $595 million in the first six months (July-Dec) of the current fiscal year, as $100 million was disbursed for the oil facility every month.

Islamabad has now made a fresh request for $1 billion worth of SOF for the next 10 months.

The provision, however, could not be resumed in January despite negotiations between the two sides. Similarly, not even a penny has been secured so far after the launch of international bonds or securing commercial loans in the current fiscal year.

Out of total projected dollar inflows of $17.6 billion for the whole financial year, Islamabad has received a total of $6.3 billion foreign loans and grants in the first seven months (July-Jan) of the current financial year. This foreign loan data, released by the Economic Affairs Division (EAD), does not include the disbursement of two tranches of worth $1.9 billion from the IMF in the current fiscal year. The foreign loan disbursement slowed down and Islamabad could fetch only $331 million in January 2024 out of which Naya Pakistan Certificates secured $103.6 million. Official data shows that the country received $2.4 billion from all multilateral creditors in the first seven months. Pakistan has secured $508.3 million for procurement of air force planes. Among the multilateral creditors, the World Bank (WB) has disbursed a major chunk of $1.05 billion in shape of IDA loan, while the Washington-based lender also provided $125.6 million in shape of IBRD loans. The Asian Development Bank (ADB) has so far disbursed $620 million in the first seven months of the current fiscal year, while disbursement from the Asian Infrastructure Investment Bank (AIIB) stands at $293 million.

The Islamic Development Bank (IsDB) has disbursed $200 million for short-term financing and $60 million for other project loans in the current fiscal year. The OPEC Fund has disbursed $27.8 million in the current financial year. The IFAD has provided so fat $23.12 million. From bilateral partners, Pakistan has secured $794.6 million in the first seven months of the current fiscal year out of which the Saudi disbursement clinched the top position as the KSA disbursed $595.18 million in shape of SOF in the first six months. The disbursement of SOF in January 2024 remained zero, as both the countries are currently negotiating a fresh deal. Saudi Arabia also disbursed project financing of $59.05 million, China $42 million, France $30.6 million, Germany $10.89 million, Japan $18.62 million, Korea $12.38 million and USA $25.67 million in the first seven months of the current fiscal year. The country has secured $2 billion as time deposit in order to shore up the foreign exchange, official data shows.