In a major development, Pakistan has received $500 million from the Asian Infrastructure Investment Bank (AIIB). This was revealed by the Finance Ministry.
According to the details, the State Bank of Pakistan (SBP) has already received the amount. This was confirmed by Finance Minister Ishaq Dar.
“Asian Infrastructure Investment Bank (AIIB) has transferred today, as per their Board’s approval, to State Bank of Pakistan/Government of Pakistan US $ 500 million as program financing,” tweeted the finance minister.
Asian Infrastructure Investment Bank (AIIB) has transferred today, as per their Board’s approval, to State Bank of Pakistan/Government of Pakistan
US $ 500 million as program financing.
— Ishaq Dar (@MIshaqDar50) November 29, 2022
Earlier this month, the finance minister had said Pakistan would receive the funds as co-financing for a development program.
“These funds will be received by the State Bank of Pakistan within November 2022,” Dar had tweeted, as cash-strapped Pakistan desperately seeks financing to cushion the impact of floods.
Board of Asian Infrastructure Investment Bank (AIIB) has today approved USD 500 million as co-financing of Asian Development Bank (ADB) funded BRACE program for Pakistan.
These Funds will be received by State Bank of Pakistan within November 2022.
— Ishaq Dar (@MIshaqDar50) November 9, 2022
Financial support for Pakistan
The funds by AIIB are crucial for the cash-strapped country, which has seen its foreign exchange reserves dwindle in recent months, especially after the cataclysmic floods which devastated the agricultural crops and dealt damages estimated at over $30 billion.
The country’s reserves stood at $7.8 billion as of November 18. On November 18, the foreign currency reserves held by the SBP were recorded at $7,825.7 million, down by $134 million compared with $7,959.5 million on November 11. According to the central bank, the decrease in reserves came due to external debt repayment.
Pertinent to mention, last month, the Asian Development Bank signed an agreement with Pakistan to provide a $1.5 billion loan for budgetary support and help flood-related rehabilitation and reconstruction activities.
The Building Resilience with Active Countercyclical Expenditures Programme is an Asian Development Bank (ADB) financing program to counter the social fallouts of economic crisis.
The loan, provided under the BRACE Programme, was provided to fund the government’s $2.3bn countercyclical development expenditure programme designed to cushion the impacts of external shocks, including the Russian invasion of Ukraine.