Total foreign loans hit $3.2 billion in July-Sept

ISLAMABAD: Pakistan secured total foreign loans of $3.2 billion during the first quarter (July-September) of this fiscal year against the disbursement of $2.9 billion in the same period of the fiscal year 2020-21, latest data revealed on Monday.

In the wake of the rising current account deficit that had already ballooned to $3.4 billion in the first quarter of the current fiscal year, the demand for foreign loans might further go up in order to avoid depletion of foreign exchange reserves. Pakistan was eyeing to generate $14 billion in shape of foreign loans in the current fiscal year.

Despite government’s inability to revive back the IMF’s programme under $6 billion Extended Fund Facility (EFF), Pakistani authorities managed $1.6 billion ($1.595 billion exactly) from multilateral creditors such as World Bank’s IDA that provided a loan worth $531.25 million in the first quarter of this fiscal year.

The government had obtained $1.485 billion from multilateral creditors during the same first quarter of the last fiscal year 2020-21. In the absence of IMF’s health certificate, Islamabad availed $111.51 million from the WB’s IBRD facility in the first quarter of the current fiscal year.

The Islamic Development Bank (IDB) disbursed a short-term loan worth $446.31 million for commodity and petroleum products financing. The Asian Development Bank (ADB) disbursed $459.95 million during the first quarter of the current fiscal year.

In the last fiscal year 2020-21, Pakistan had obtained $1 billion safe deposits from China in order to pay back the same amount to Saudi Arabia. However, in the current fiscal year, the government generated major dollar inflows from multilateral creditors, issuance of international bonds, and thirdly through commercial banks respectively during the first quarter of the ongoing fiscal year.

The government fetched $1.041 billion through issuance of international bond in the first quarter of this fiscal year that helped it generate dollar inflows in shape of loans for obtaining $3.2 billion.

According to official data of Economic Affairs Division (EAD) the bilateral creditors disbursed $110.41 million in the first quarter of this fiscal year as China provided $73.35 million, France $0.53 million, Germany $2.26 million, Italy zero amount, Japan $1.02 million, Korea $1.59 million, Kuwait zero amount, Oman $0.13 million, Saudi Arabia $1.03 million, UK $3.15 million, and USA $27.27 million. The government had raised $105 million through bilateral creditors in the first quarter of the last fiscal year 2020-21.

Among the multilateral creditors, the Asian Infrastructure Investment Bank (AIIB) disbursed $37.77 million, EIB and EU zero amount, WB’s IBRD $111.51 million, WB’s IDA $531.25 million, IDB $1.61 million and IDB’s short term $446.31 million, IFAD $6.08 million, Multi-Donor Trust Fund (MDTF) $0.83 million, and DFID zero amount.

The government obtained $61 million from Ajman Bank PJSC, $215 million from Dubai Bank, and $181.54 million from SCB (London) in the first quarter of the current fiscal year. In totality the government raised total foreign loans and grants to the tune of $3.2 billion in the first quarter of the current fiscal year. It had budgeted to raise foreign loans of $14.088 billion in whole fiscal year 2021-22 in order to meet all its due obligations.