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Pakistan receives $ 1.39 billion emergency loan from IMF to tackle coronavirus crisis – The New Indian Express

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Through PTI

ISLAMABAD: Cash-strapped Pakistan received an emergency loan of $ 1.39 billion from the IMF to increase its foreign exchange reserves following the further economic downturn due to the coronavirus crisis.

The $ 1.39 billion loan comes on top of the $ 6 billion bailout Pakistan signed with the International Monetary Fund (IMF) in July last year to avert a balance of payments crisis .

“The SBP (State Bank of Pakistan) has received $ 1.39 billion under the IMF’s Rapid Finance Instrument (RFI),” the central bank said in a tweet on Wednesday.

In March, Pakistan asked the global moneylender for a low-cost, fast-disbursing loan under its Rapid Finance Instrument (RFI) to address the negative economic impact of COVID-19.

The RFI is used to provide financial assistance to IMF member countries facing an urgent balance of payments need without forcing them to put in place a full-fledged program.

According to an article in The Express Tribune, the $ 1.39 billion loan will push Pakistan’s foreign exchange reserves apparently to a one-month high above $ 12 billion.

The IMF board last week approved the low-cost emergency loan to help Pakistan meet the urgent balance of international payment needs in the face of the COVID-19 pandemic, according to a recent IMF statement .

With the latest rally of Rs 0.76 in the interbank market on Wednesday, the rupee has cumulatively gained Rs 7.53, or 4.5%, over the past two weeks to reach a one-month high at Rs 160.36 for the US dollar, the SBP said in a statement.

Previously, foreign exchange reserves fell to their lowest level in four months at $ 10.97 billion on April 10, 2020, according to the central bank’s weekly update on Thursday last week.

Reserves had been partially depleted due to the withdrawal of capital worth about $ 2.69 billion by short-term foreign investors from the Pakistani debt market over the past five to six weeks.

Many of them sold premature T-bills and Pakistan’s long-term investment bonds in panic following the rapid spread of the coronavirus across the world.

External debt repayments have also consumed foreign exchange reserves over the past four months.

Pakistan has also approached other multilateral donors for additional funds to combat the pandemic and its economic implications.

The World Bank previously approved $ 1 billion and the Asian Development Bank (ADB) $ 1.5 billion for Pakistan to keep its economy afloat.