ADB to approve $2b financing

ISLAMABAD: The Asian Development Bank (ADB) is set to approve approximately $2 billion in loans before the end of December. The inflow, along with the new finance minister backing the policy to retain non-tariff barriers to discourage imports, will help Pakistan sustain its foreign exchange reserves at the current levels.
The ADB is expected to approve a $1.5 billion loan on October 21st, followed by another emergency assistance loan in the range of $400 million to $500 million, which is scheduled to be approved on December 13th, according to the people privy to these discussions.
These loans are expected to support the current foreign exchange reserves, critically low at $8 billion, amid the government’s move to tighten the noose around currency market speculators to strengthen the rupee.
However, until conditions in the exchange market normalise, it is unlikely that the government will ease restrictions on the import of automobiles, machinery and equipment, disclosed sources.
Meanwhile, Finance Minister Ishaq Dar on Wednesday chaired the first meeting of a committee that the prime minister set up to resolve the problems being faced by the importers and exporters due to the restrictions imposed by the central bank.
The meeting discussed modalities to facilitate the business community regarding imports and enhancing exports, according to a statement issued by the ministry of finance.
The finance minister, however, did not agree to lift restrictions until normalcy returns to the exchange market and pressure on the external sector eases, the officials said.
Earlier, these restrictions were placed to reduce the high imports that raised the alarm of the country’s risking default.
Meanwhile, the rupee has recovered 6.6% of its value in the past 10 days, while imports have also reduced by 21% during the first quarter of the current fiscal year.
In another instance on Wednesday, Dar met with a delegation of the ADB headed by its Country Director Yong Ye at the finance division. ADB’s Deputy Country Director Asad Aleem was also present in the meeting.
The ADB country director informed the finance minister that ADB will provide flood relief support to Pakistan to the tune of $2.3 billion to $2.5 billion, including US$ 1.5 billion for Building Resilience with Active Countercyclical Expenditures (BRACE). -PNP