IMF inclined to reduce gross foreign exchange reserves estimate
- The IMF is inclined to reduce its foreign exchange reserves estimate.
- The EAD does not include flows from the IMF in its statistics.
- The EU and EIU have not yet distributed any loan funds in the current financial year.
ISLAMABAD: Amid a drawdown in official foreign exchange reserves despite signing the IMF program of $3 billion, Islamabad has borrowed $3.8 billion from multilateral and bilateral lenders in the period of first four months (July-October) of the current financial year 2023-24. Have secured. news Information was given on Tuesday.
The official figures from the Economic Affairs Division (EAD) do not include the $1.2 billion disbursed by the IMF following the approval of the $3 billion Standby Arrangement (SBA) programme. Thus, the total dollar inflow in the form of loans was $5 billion.
Now the IMF is also keen to reduce the estimate of gross foreign exchange reserves as it may see a decline from $12.9 billion to about $11.6 to 11.9 billion by the end of the current financial year.
The government has estimated the total foreign debt for the current financial year at $17.619 billion.
In the official estimate, the government had included $2.4 billion from the IMF for the current fiscal year. However, Pakistan had signed on to the SBA program worth $3 billion, of which $1.2 billion had been disbursed by the fund so far in August 2023. Now another IMF tranche of $700 million was expected to be distributed after the approval of the Fund’s Executive Board.
In this scenario, all estimates of dollar flows in the form of gross official reserves, net international reserves (NIR), current account deficit and external debt for the current fiscal year were changed.
The distribution of foreign loans received by Pakistan showed that Pakistan received $318.1 million during October 2023.
Islamabad had secured $3.52 billion in the first three months (July-September) of the current financial year. Pakistan had received a guaranteed loan of $508.34 million.
Loan disbursement from the Asian Development Bank (ADB) in the first four months of the current financial year stood at $87.5 million. From AIIB, the total loan amount disbursed was $27.86 million. The European Union (EU) and EIU have not disbursed any loan amount so far in the current financial year.
The World Bank’s IDA loan disbursement was $303.43 million and the IBRD loan was $67.28 million. In the first four months of the current fiscal year, IFAD has disbursed $11.43 million, ISDB has disbursed $100 million, and OPEC Fund has disbursed $0.01 million.
Multilateral lenders disbursed a total of $597.49 million during the first four months of the current fiscal year. All bilateral creditors disbursed $435 million in the first four months, of which the Kingdom of Saudi Arabia disbursed $400 million for the oil facility during the July–October period of the current fiscal year.
The government also received $2 billion in the form of fixed deposits from KSA in the current financial year. The government has not issued any international bonds so far in the current financial year.
Finance Minister Dr Shamshad Akhtar had already announced the postponement of plans to raise $1.5 billion in international bonds. Pakistan received $306.26 million in the form of Naya Pakistan Certificates in the first four months.
The foreign exchange reserves held by the SBP declined from $8.1 billion on July 23, 2023, to $7.3 billion on November 10, 2023, mainly due to repayments on external debt fronts during the period.
Originally published in news