KARACHI: Pakistan on Wednesday received $1 billion loan from the Asian Development Bank (ADB) and the World Bank (WB) to keep battling against the COVID-19 pandemic, the country’s central bank announced.
“[The State Bank of Pakistan] has received [$1 billion] today with $500 million each from [the] ADB and WB,” the central bank said in a Twitter post.
The Asian lender had approved $500 million on June 10 to help Pakistan with social protection programs for the poor and vulnerable, expand health sector capabilities, and deliver a pro-poor fiscal stimulus to boost growth and create jobs as the country tries to stem the spread of coronavirus.
The amount received by the country is part of the $1.5 billion signed this month with multilateral lenders, including the Asian Infrastructure Investment Bank (AIIB).
The inflows have eased pressure on the country’s currency market where demand for the US dollar had gradually started taking its toll from the Pak rupee, hollowing it out by 0.61 percent during this week. However, Wednesday’s inflows supported the national currency that appreciated by 0.29 percent to close at Rs 167.36 against the American greenback.
“The much anticipated inflows have somewhat supported the Pak rupee. Any additional inflows will stabilize the currency market further,” Samiullah Tariq, head of research at Pakistan-Kuwait Investment (PKI), told Arab News.
The inflows have increased the country’s foreign exchange reserves to about $17.78 billion, up from $16.77 billion as reported on June 12.
The central bank also announced that the country had posted a current account surplus of $13 million in May due to a sharp decline in its import bill.
Economists describe it as positive development since the country is also struggling to deal with the impact of the coronavirus.
“Due to the current situation, the country was not in a position to afford huge current account deficits. At least there will be no pressure on the government at the external front,” Muzamil Aslam, senior economist, told Arab News.
