Islamabad: In the absence of an International Monetary Fund (IMF) umbrella, foreign loan disbursements stood at only $1.7 billion in first five months of the current fiscal year that may undermine government’s efforts to take pressure off its foreign currency reserves.
The $1.72-billion loan disbursements from July through November were equal to only 18% of the original annual estimates, finance ministry officials told The Express Tribune on Monday.
The $2-billion loan that Pakistan got from Saudi Arabia to bolster the dwindling reserves is not part of these disbursements. The Saudi assistance has been shown on books of the central bank.
The official gross foreign currency reserves held by the State Bank of Pakistan (SBP) stood at $8 billion on the back of the Saudi loan that Pakistan has obtained at an interest rate of 3.18%.
The disbursements in the July-November period from international creditors were down $1 billion or 37% when compared with the loans received in the same period of previous fiscal year. From July through November 2017, Pakistan had received $2.7 billion in loans.
Last month, Pakistan received another short-term commercial loan facility of $50 million from a consortium led by Credit Suisse AG, taking its total contribution in five months to $270 million, according to the finance ministry officials.
In addition to that, Pakistan has already secured $160 million from Dubai Islamic Bank (DIB) and $20 million from Noor Bank, the UAE.
Foreign loans are not sufficient to meet Pakistan’s growing financing needs, which have now been revised downwards to $22 billion on hopes that the government would be able to curtail the current account deficit to $13 billion.