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KARACHI: Pakistan has received inflows of $3 billion as loans in a week from multilateral agencies for budget support in the wake of COVID-19.

The country has received over one billion dollars fresh loan inflows from the Chinese bank to deal with COVID-19 and build the depleting foreign exchange reserves. The State Bank of Pakistan (SBP) has confirmed arrival of these inflows on Tuesday.

"SBP has received $1.3 billion as GOP loan disbursements from Chinese Banks this week. This brings the total amount of official inflows received since 23rd June 2020 to around $3 billion," the SBP said.

COVID-19 has adversely affected Pakistan's economy, which may, as per initial estimates, post a negative 0.4 percent GDP growth during FY20. In addition, the pandemic leads to a sharp decline in revenue collection, large-scale manufacturing and significant job losses in Pakistan.

In the mid of June, Pakistan signed an agreement with the Asian Development Bank (ADB) for a $500 million loan. The World Bank (WB) and the Asian Infrastructure Investment Bank (AIIB) each also signed loan agreements with the government of Pakistan for the same amount, totaling $1.5 billion financial support for Pakistan.

Out of this committed amount, on June 23, Pakistan received inflows amounting to one billion dollar. Some $500 million each was received from ADB and WB. In addition, on June 25, 2020, Pakistan received some $725 million fresh inflows from multilateral agencies. This amount includes some $225 million from the World Bank and $500 million from the Asian Infrastructure Investment Bank.

Now with the release of inflows from Chinese Banks, cumulatively some $3 billion inflows as loan arrived in a week.

As per last data released by the SBP, the total liquid foreign reserves held by the country stood at $16.730 billion as on June 19, 2020. After receipt of these inflows, the total liquid foreign reserves are likely to cross the $19 billion mark. Reportedly, another $500 million have been approved by the World Bank for Pakistan.

Copyright Business Recorder, 2020