ISLAMABAD: The State Bank of Pakistan (SBP) on Tuesday received US $1.3 billion from the Asian Development Bank (ADB) in connection with the policy based lending committed by the ADB to support Pakistan’s budget and energy sector reforms, said a spokesman of the central bank.
With this inflow of foreign currency, the central bank’s foreign exchange reserves have swelled to more than $10 billion.
Earlier this week, Pakistan and the ADB had signed two loan programmes amounting to US $1.3 billion.
The loan programmes aimed at improving exchange rate management, strengthen public financial management to mobilize more revenues, restore allocated efficiency of scarce public resource, address the power sector pricing issues and reduce the social impacts of macroeconomic stability measures by improved targeting and transparency of existing social protection programmes.
The loan agreements were signed by Secretary, Economic Affairs Division, Dr Syed Pervaiz Abbas and Country Director ADB Xiaohong Yang and were witnessed by Minister for Economic Affairs, Muhammad Hammad Azhar.
On Dec 6, the Asian Development Bank (ADB) had approved one billion dollars budgetary support for Pakistan to help the country further improve its financial and economic condition.
The approval of budgetary support was the outcome of the steps taken by the government for protection of disadvantaged segments of the society.
A press release issued by the ADB had read the quick dispersing Special Policy-Based Loan is part of a comprehensive multidonor economic reform program led by the International Monetary Fund (IMF) to stabilize Pakistan’s economy after a major deterioration in its fiscal and financial position in mid-2018 caused growth to slump and threatened progress in alleviating poverty.
“ADB’s financing was approved after the government implemented a series of IMF-supported reforms and actions to improve its current account deficit, strengthen its revenue base, and protect the poor against the social impact of the economic crisis,” it had said.