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Pakistan receives USD 1.39 billion emergency loan from IMF to deal with Coronavirus crisis

ISLAMABAD, April 23 (PTI) Pakistan, which is in trouble, has received  USD 1.39 billion emergency loan from the International Monetary Fund to increase its foreign exchange reserves due to the new economic recession due to the Coronavirus crisis.

The USD 1.39 billion loan is added to the USD 6 billion bailout package that Pakistan signed with the International Monetary Fund in July last year to avoid a balance of payments crisis.

Pakistan receives USD 1.39 billion emergency loan from IMF to deal with Coronavirus crisis

"The State Bank of Pakistan (SBP) received $ 1.39 billion dollars under the Rapid Financing Instrument (RFI) from the IMF.," the central bank said in a tweet on Wednesday.

In March, Pakistan applied to the global lender for a low-cost, fast-disbursed loan under  Rapid Financing Instrument (RFI) to deal with the negative adverse impact of COVID-19.

The RFI is used to provide financial assistance to IMF member countries that face an urgent need for a balance of payments without requiring them to implement a comprehensive program.

According to a report published by The Express Tribune, the USD 1.39 billion loan will push Pakistan's foreign currency reserves to a one-month high above USD 12 billion.

The International Monetary Fund Executive Board approved a low-cost emergency loan last week to help Pakistan meet the urgent balance of international payment needs in the face of the COVID-19 pandemic, according to a recent statement from the International Monetary Fund.

With the recent recovery of Rs. 0.76 in the interbank market on Wednesday, the rupees have cumulatively recovered Rs. 7.53, or 4.5 percent, in the past two weeks to a one-month high of Rs. 160.36 per US dollar, SBP said in a statement.

Previously, foreign exchange reserves fell to a four-month low of USD 10.97 billion on April 10, 2020, according to the central bank's weekly update on Thursday of last week.

The reserves have been partially depleted by the pullout of the capital by short-term foreign investors worth USD 2.69 billion from the Pakistani debt market in the past five to six weeks.

Many of them sold premature treasury bonds and Pakistani long-term investment bonds in panic after the rapid spread of coronavirus around the world.

Foreign debt repayments have also consumed foreign exchange reserves in the past four months.

Pakistan has also approached out multilateral donors to obtain additional funds to fight the pandemic and its economic implications.

The World Bank has earlier approved USD 1 billion and the Asian Development Bank  ( ADB ) USD 1.5 billion for Pakistan to keep its economy afloat. PTI SH SCY SCY

PC: TechGenyz, Dawn

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