Pakistan: Lifeline for Imran Khan; ADB to lend debt-struck cash-strapped Pak $1.3 billion

Pakistan on Monday signed an agreement with Asian Development Bank for a loan worth USD 1.3 billion to support cash-strapped country's public finances and shore up its slowing ecomy.

"Ecomic Affairs Division and ADB have signed policy-based loans of USD 1.3 Bn today. sums will be disbursed today and will help bolster reserves and strengn our ecomic outlook," Ecomic Affairs Minister Hammad Azhar tweeted.

On Friday, bank said it has approved a USD 300 million policy-based loans that will help Pakistan to address financial sustainability, governance, and energy infrastructure policy constraints in country's energy sector.

Under deal, ADB will provide loan to help stabilize foreign exchange reserves of country.

Pakistan is facing a serious ecomic crisis with short supplies of foreign currency reserves and stagnating growth in recent years.

ADB loan comes just days after investment rating ncy Moody's changed Pakistan's outlook from negative to stable.

Since assuming power in August 2018, Prime Minister Imran Khan has been appealing to close allies like China and Saudi Arabia to provide loans to reduce size of bailout pack that Islamabad sought from International Monetary Fund (IMF).

ADB's quick dispersing special policy-based loan is part of a multi-dor ecomic reform programme led by IMF to stabilise Pakistan's ecomy after a major deterioration in its fiscal position in 2018, according to a statement by Manila-based regional lender.

ADB agreement 

Under agreement, USD 1 billion has been extended to Pakistan to improve its current account deficit and strengn its revenue base.

financing will support first of three sub-programmes totalling USD 1 billion under Pakistan's Energy Sector Reforms and Financial Sustainability Programme, bank said.

Apart from ADB loan, Pakistan government has borrowed USD 10.40 billion from friendly countries like China and UAE to stabilise foreign exchange reserves and repayment of old loans.

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