The Government of Pakistan today has confirmed receipt of $500 million from the Asian Infrastructure Investment Bank (AIIB) for social protection, food security, and support employment amid devastating floods and global supply chain disruptions.
“Govt of Pakistan has today received US$ 500 million from Asian Infrastructure Investment Bank (AIIB). The funds are deposited with SBP and will augment our reserves,” the Ministry of Finance tweeted.
Govt of Pakistan has today received US$ 500 million from Asian Infrastructure Investment Bank (AIIB). The funds are deposited with SBP and will augment our reserves. @AIIB_Official @StateBank_Pak @MIshaqDar50
— Ministry of Finance (@FinMinistryPak) November 29, 2022
The funds are part of a co-financing package for the Asian Development Bank (ADB) funded BRACE Program to counter the social fallouts of the economic crisis in Pakistan.
The inflows will help the government deal with the impact of the immediate shocks to the economy and reinforce the structural reforms that are necessary to improve the country’s medium- to long-term macroeconomic prospects, while at the same time reflecting a slight jump in its forex reserves in next week’s update.
Last month, the ADB approved $1.5 billion in financing to assist Pakistan in providing social protection, promoting food security, and supporting its population. The central bank at the time announced that it had received $1.5bn from the ADB “as disbursement of policy-based loan for the government of Pakistan”.
The loan, made possible by the BRACE program, will contribute to the government’s $2.3 billion countercyclical development expenditure program designed to mitigate the effects of external shocks such as Russia’s invasion of Ukraine.