The Economic Times
12,248.2567.9
Stock Analysis, IPO, Mutual Funds, Bonds & More

Pakistan, Asian Development Bank sign loan agreement worth USD 1.3 billion

On Friday, the bank said it has approved a USD 300 million policy-based loan that will help Pakistan to address financial sustainability, governance, and energy infrastructure policy constraints in country's energy sector.

PTI|
Updated: Dec 09, 2019, 06.36 PM IST
0Comments
Getty Images
Untitled design - 2019-12-09T183539.394
ISLAMABAD: Pakistan on Monday signed an agreement with the Asian Development Bank for a loan worth USD 1.3 billion to support the cash-strapped country's public finances and shore up its slowing economy.

"Economic Affairs Division and ADB have signed policy-based loans of USD 1.3 billion today. The sums will be disbursed today and will help bolster reserves and strengthen our economic outlook," Economic Affairs Minister Hammad Azhar tweeted.

On Friday, the bank said it has approved a USD 300 million policy-based loan that will help Pakistan to address financial sustainability, governance, and energy infrastructure policy constraints in country's energy sector.

Under the deal, the ADB will provide the loan to help stabilize the foreign exchange reserves of the country.

Pakistan is facing a serious economic crisis with short supplies of foreign currency reserves and stagnating growth in recent years.

The ADB loan comes just days after investment rating agency Moody's changed Pakistan's outlook from negative to stable.

Since assuming power in August 2018, Prime Minister Imran Khan has been appealing to close allies like China and Saudi Arabia to provide loans to reduce the size of the bailout package that Islamabad sought from the International Monetary Fund (IMF).

The ADB's quick dispersing special policy-based loan is part of a multi-donor economic reform programme led by the IMF to stabilise Pakistan's economy after a major deterioration in its fiscal position in 2018, according to a statement by the Manila-based regional lender.

Under the agreement, USD 1 billion has been extended to Pakistan to improve its current account deficit and strengthen its revenue base.

The financing will support the first of three sub-programmes totalling USD 1 billion under Pakistan's Energy Sector Reforms and Financial Sustainability Programme, the bank said.

Apart from the ADB loan, the Pakistan government has borrowed USD 10.40 billion from friendly countries like China and the UAE to stabilise the foreign exchange reserves and repayment of old loans.

Also Read

Asian Development Bank President Takehiko Nakao resigns

RBI fund transfer to push economy: Asian Development Bank

Asian Development Bank delegation meets Sarbananda Sonowal

Asian Development Bank approves Rs 1,650 crore infrastructure projects in Tripura

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service