SBP Reserves Soar to $8.9 Billion Due to ADB Loan

The foreign exchange reserves held by the central bank decreased by almost 20 percent on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

On October 28, the foreign currency reserves held by the SBP were recorded at $8.913 billion, up $1.473 billion compared to $7.440 billion on October 21.

The massive increase in the central bank’s reserves was entirely due to the receipt of $1.5 billion from the Asian Development Bank (ADB).

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $ 14.678 billion. Net reserves held by banks stood at $5.766 billion, registering an increase of $44 million.

It is pertinent to mention here that the ADB has provided the financing to help the Government of Pakistan provide social protection, promote food security, and support employment for its people amid devastating floods and global supply chain disruptions.

The regular loan of $1.25 billion will have a 7-year term, including a grace period of 3 years. The interest rate would be determined in accordance with ADB’s Flexible Loan Product plus 75 basis points and a commitment charge of 0.15 percent per year which will likely take the total interest rate to over 3 percent.

The $250 million concessional loan will have a 25-year term, including a grace period of 5 years and an interest rate of 2 percent per year during the grace period and thereafter.

Source: Pro Pakistan