Islamabad: Pakistan received $500 million in loan inflows from the Asian Development Bank (ADB) on Thursday, a development confirmed by the State Bank of Pakistan (SBP). The funds, disbursed under the Climate Change and Disaster Resilience Enhancement Program (CDREP), are expected to bolster the country’s foreign exchange reserves, which are projected to surpass $12 billion by the end of November 2024.
In a statement issued Friday night, the SBP announced, “The SBP has received US$500 million from the Asian Development Bank as proceeds of a loan to the government of Pakistan for the Climate Change and Disaster Resilience Enhancement Program.” The inflows will be reflected in the SBP’s foreign exchange reserves for the week ending November 29, 2024, with the updated figures to be published on December 5, 2024.
As of November 22, 2024, the SBP’s reserves stood at $11.42 billion, enough to cover over two months of import payments. With the addition of the ADB loan, reserves are on track to cross the $12 billion mark, in line with the SBP Governor Jameel Ahmed’s earlier projection. The governor had predicted a steady upward trend in reserves, driven by external inflows and economic adjustments.
This loan agreement with the ADB was signed last week as part of efforts to enhance Pakistan’s capacity to address risks posed by climate change and natural disasters. The funds come at a time when Pakistan’s economic indicators are showing signs of recovery.
Analysts believe the rise in foreign exchange reserves, supported by robust workers’ remittances, export growth, and disbursements from the IMF’s Extended Fund Facility (EFF), will help stabilize the external current account. Pakistan recorded a $218 million current account surplus in July-October FY25, compared to a $1.528 billion deficit in the same period last fiscal year. Workers’ remittance inflows during July-October FY25 reached $11.85 billion, marking a 35% increase year-on-year.
The latest inflow from the ADB reinforces Pakistan’s efforts to strengthen its financial stability while addressing critical challenges related to climate change and disaster preparedness.
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