ISLAMABAD         -          Pakistan had borrowed $434.5 million loan from external sources during the month of November that helped in building the country’s foreign exchange reserves.

 Pakistan had received $2.96 billion as loan from multilateral and bilateral sources and commercial banks in five months (July to November) of t he current fiscal year. The amount is over 22.8 percent of the annual borrowing. The government of Pakistan had projected to borrow $12.957 billion from multilateral and bilateral creditors and commercial banks in the year 2019-20.  However, borrowing of $991 million from the International Monetary Fund (IMF) is not part of the $2.96 billion that government borrowed in five months of the current fiscal year.

The borrowing amount would increase in next month when the government would include the data of loans that Pakistan had taken in current month. In ongoing month, the Asian Development Bank ADB (ADB) had approved two different loans for Pakistan worth of $1.3 billion.  Pakistan and World Bank had also signed loan agreement worth $406.6 million for Khyber Pass Economic Corridor (KPEC) Project in December.

The breakup of loan $2.96 billion that government borrowed in five months showed that bilateral countries had given loan of $489.3 million, multilateral had disbursed $1.15 billion and commercial banks had given loan of $1.05 billion during first five months of the current fiscal year. Meanwhile, the government has also borrowed $273.5 million from Saudi Arabia as short-term loan.

The data showed that government borrowed $1.05 billion from foreign commercial banks in July to November period. The federal government had budgeted to borrow $2 billion foreign commercial loans during ongoing financial year. China disbursed $298.14 million in the first five months of fiscal year 2019-20. The Islamic Development Bank disbursed $351.61 million in July to November out of the total of $1.1 billion budgeted for the current fiscal year. Asian Development Bank (ADB) disbursed $606.72 million, United Kingdom (UK) $113.14 million, World Bank $107.88 million, International Fund for Agricultural Development (IFAD) $27.04 million, USA $30.73 million and Japan $21.25 million in the first five months of current fiscal year.

The amount of borrowing from external sources would increase in the months to come. The ministry of finance had already initiated the process of issuing Eurobonds and international Sukuk to raise the foreign exchange reserves of the country. Pakistan has planned to raise at least one billion dollars from international market by issuing Sukuk bonds in next couple of months that would help in building the country’s foreign exchange reserves

The International Monetary Fund (IMF) in its recent on Pakistan had projected country’s external debt to reach $113 billion by this fiscal year-end. Pakistan’s overall debt and liabilities had mounted to Rs41.5 trillion by the end of September. The latest data of State Bank of Pakistan (SBP) showed that Pakistan’s domestic debt surged to Rs22.6 trillion with addition of Rs5.73 trillion in last one year. Meanwhile, the country’s external debt was recorded at Rs10.7 trillion by the end of September.