First half of current fiscal year: Dollar inflows jump to 9.27 billion mark

ISLAMABAD: Pakistan's dollar inflows jumped up to $9.27 billion in the first half (July-Dec) period of the current fiscal year after receiving a major chunk of a $3 billion loan from Saudi Arabia in December 2021.

Alone in December 2021, Pakistan had obtained dollar inflows to the tune of $4.525 billion in the shape of loans, and then a major chunk of $3 billion was received from Saudi Arabia on account of time deposits.

Despite receiving generous dollar inflows, the country’s foreign exchange reserves held by the State Bank of Pakistan (SBP) continued to decline. Pakistan's total liquid foreign reserves stood at US$23.34 billion as of 14-January-2022. The foreign exchange reserves held by the SBP stood at $17.035 billion and net reserves held by the commercial banks were standing at $6.314 billion. During the week ended on 14-January 2022, the SBP reserves decreased by $562 million to $17.035 billion due to external debt and other payments. In August 2021, the foreign exchange reserves held by the SBP stood at over $20 billion but despite dollar inflows from Saudi Arabia and the IMF to the tune of around $5 billion, the reserves still decreased by over $3 billion.

Earlier, in the first five months (July-Nov) period, total dollar inflows stood at $4.699 billion, so a sudden jump of $4.525 billion in December 2021 pushed up dollar inflows to the tune of $9.2 billion in the first six months of the current fiscal year.

Owing to the stalled IMF program, Islamabad is continuously relying upon mustering up dollar inflows through commercial loans from banks. Official data on foreign loans and grants showed that China provided bilateral guaranteed loans of $291.5 million in the first six months of the current fiscal year. The commercial banks (NBP Bahrain) and others provided $301.522 million in the July-Dec period of the fiscal year 2021-22.

Total bilateral loans and grants from different friendly countries provided financing of $150.193 million in the first six months of the current fiscal year out of which China provided $74.5 million, France $6.87 million, Germany $12.07 million, Japan $5.151 million, Korea $3.22 million, Saudi Arabia $1,092,000, UK $14.537 million and the USA $32.60 million.

Pakistan had generated $1.04 billion through the launching of Eurobond in first six months of the current fiscal year. Islamabad launched the Eurobond for raising over $1 billion in July 2021. Now the PTI government has recently launched another international Islamic bond known as Sukuk at the highest-ever rate of 7.95 percent in January 2022, so this amount of $1 billion will be reflected in the data of official dollar inflows next month.

The commercial banks provided loans to the tune of $2.031 billion during the first half of the current fiscal year as Ajman Bank provided commercial loan of $61,000,000, Dubai Bank $1.14 billion, SCBL (London) $487.255 million and SUISSE, AG, UBL and ABL consortium provided loan of $343 million. In December 2021, the commercial banks provided loans of $502.054 million to Pakistan for meeting its financing requirements.

The multilateral creditors provided loans to the tune of $2.9 billion in first six months of the current fiscal year out of which ADB disbursed total loans of $1.06 billion, AIIB $37.7 million, EU $22.55 million, World Bank’s IBRD loan of $158.7 million, WB’s IDA funding of $807.034 million, IDB $4.308 million, IDB (short term) $800.686 million and IFAD $13.964 million.