Pakistan receives 1.3b US dollar to pay debt/ energy reforms

The state bank of Pakistan receives 1.3b US dollars to pay debt and combat energy sector reforms.

BOl News learned that the central bank’s scheduled weekly update on Thursday (December 12) foe reserves position is going to record the outflow.

Sources said the reserves may, however, exactly not reflect the amount of over $1 billion paid in Sukuk considering accounting-in other inflows and outflows during the week ended December 6.

It is to remember the state bank makes weekly updates on the reserves position with a leg one-week duration to make sure all transactions are properly accounted-in.

The country’s foreign currency reserves hit eight-month high at $9.11 billion with a net inflow of $431 million recorded in the week ended November 29, 2019, according to the central bank latest update.

Earlier, ADB had approved the financing of $1.3 billion including $1 billion under its crisis response facility to support the country pay off debt and another $300 million for energy sector reforms.

The bank extended the crisis response facility for a period of seven years at an interest rate of London-Interbank Offered Rate plus 2%, which comes to around 4%.

It was learned that the fund for the energy sector reforms was lent for a period of 20 years at an interest rate of 2%.

ADB agreed to extend the financing following Pakistan entered the latest International Monetary Fund’s (IMF) loan programme of $6 billion in May to improve its capacity to pay for imports and make foreign debt repayments.

IMF second tranche of $450 million is expected in late January or early February. It paid the first tranche of close to $1 billion in July.