News
Tuesday, September 16, 2008
Pakistan expects $5.5bn to $6.5bn foreign exchange
* Amount will include $1 billion from ADB, $500 million from IDB and $4 billion to $5 billion from Saudi Arabia
By Sajid Chaudhry
ISLAMABAD: Pakistan is expecting between $5.5 and $6.5 billion foreign exchange cushion from international donors during the second quarter (October-December) of the current fiscal year, official sources said on Monday. The amount would include $1 billion from the Asian Development Bank (ADB), a $500 million syndicate financing from the Islamic Development Bank (IDB) and $4 billion to $5 billion in the form of an integrated economic assistance package from Saudi Arabia, the sources said. According to the sources, the Asian Development Bank is set to start its disbursements for the current fiscal year with the $500 million Economic Stabilisation Programme (ESP) by the end of September. They said the ADB was considering some tough stipulations in the programme, and that the fund would be released to the country after they were finalised. The Asian Development Bank would also provide $500 million in the second quarter as part of its annual commitment to finance projects in the pipeline. According to the sources, Saudi officials are finalising an integrated package worth $4 billion to $5 billion for Pakistan, which will include cash economic assistance, the provision of fertiliser on deferred payment and a major portion for the Saudi oil facility. Pakistan is also negotiating a $500 million syndicate financing package with the Islamic Development Bank. Islamabad has previously negotiated $50 million and a deal for another $50 million is underway for various import options. A dialogue will soon start for the syndicate financing of $400 million for the import of fertiliser. Inflows of over $1 billion and other foreign exchange cushion against imports would help Pakistan manage its depleting gross foreign exchange reserves that stand at $9.1 billion. According to the sources, gross foreign exchange reserves of the country include $3 billion in foreign currency accounts maintained in commercial banks. Net foreign exchange reserves of the country are estimated at $4.6 billion. The World Bank and other international financial institutions have stopped programme loans for Pakistan because of its macro-economic instability. The country will get loans from the World Bank only after it improves the macro-economic indicators as per benchmarks set by international financial institutions.
Courtesy DailyTimes