KARACHI: The State Bank of Pakistan (SBP) on Tuesday received $1.3 billion just a day after signing an agreement with the Asian Development Bank (ADB) in Islamabad.
The $1.3bn inflow from the ADB pushed up central bank’s reserves to an eight-month high at $10.41bn.
Moreover, the country’s total reserves including the central bank and commercial bank holdings also jumped to an eight-month high reaching $17.293bn. The government, as part of the agreement with the ADB, plans to utilize $1.3bn for the economic stabilization program.
The ADB earlier said the aim of the loan is to reduce the social impact of macroeconomic stability measures.
The purpose of the investment is to bring stability in the exchange rate while strengthening public financial management.
The bank also said that of the total $1.3bn, around $300 million has been set aside for reforms in the energy sector to address the energy shortfall and shortcomings in the energy policy.
Since the beginning of the current financial year, inflows from bilateral and multilateral donors have helped increased the central bank’s foreign exchange reserves and stabilize the exchange rate.
The greenback also fell to a six-month low in the open market on Saturday while it also fell below Rs155-mark in the inter-bank market on Monday.
Although foreign direct investment in the country has failed to pick up over the last fiscal year, the foreigners’ increasing interest in government securities reached $1bn.