The Asian Infrastructure Investment Bank (AIIB) has transferred $500 million to the State Bank of Pakistan’s account under the Asian Development Bank (ADB)-funded Building Resilience with Active Countercyclical Expenditures (BRACE) program. Finance Minister Ishaq Dar confirmed the development in a tweet; he wrote, “Asian Infrastructure Investment Bank (AIIB) has transferred today, as per their Board’s approval, to State Bank of Pakistan/Government of Pakistan US $ 500 million as program financing.”
Asian Infrastructure Investment Bank (AIIB) has transferred today, as per their Board’s approval, to State Bank of Pakistan/Government of Pakistan
US $ 500 million as program financing.— Ishaq Dar (@MIshaqDar50) November 29, 2022
Asian Infrastructure Investment Bank to Counter Economic Crisis
BRACE is ADB’s financing program to counter the economic crisis that Pakistan is currently facing as the country looks for more and more financing options to cushion the impact of floods. In October, ADB also approved $1.5 billion in financing to help Pakistan provide social protection, promote food security, and support employment for flood-affected families. ADB Director General for Central and West Asia Yevgeniy Zhukov said, “Increasing business costs and rising living expenses are affecting millions of Pakistanis, especially the poor and vulnerable. ADB’s program will help the government manage the impacts of high prices, increasing food insecurity, slowing business activity, and reducing income for vulnerable groups, many of whom are also reeling from the devastating floods.”
ADB Director for Public Management, Financial Sector, and Trade Tariq Niazi said, “The program is part of a comprehensive and well-coordinated package of support. It will help the government deal with the impact of the immediate shocks to the economy, while, in parallel, continuing the structural reforms that are necessary to improve the country’s medium- to long-term macroeconomic prospects.”
Reverting the Economic Crisis
As per details, the loan, provided under ADB’s BRACE program, will help fund the government’s $2.3 billion countercyclical development expenditure program designed to cushion the impacts of external shocks, including the Russian invasion of Ukraine. Currently, the SBP-held Forex reserves stand at $7.8bn, which can barely cover a month’s imports.
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