ISLAMABAD: The World Bank (WB) has suspended programme loans/budgetary support for Pakistan owing to deteriorating macroeconomic indicators; however, the Washington-based lender will continue providing project loans to Islamabad, it is learnt.
“Last month, the WB team conveyed Pakistani authorities that they cannot provide programme loans/budgetary support because of macroeconomic indicators,” sources from the World Bank based in Washington confirmed to The News here on Sunday.
The WB, they said, linked provision of programme lending with letter of comfort (LoC) from the IMF. The IMF used to gauge the economic health of the country on the basis of macroeconomic indicators, so it seemed that dark clouds had started hovering around Islamabad for luring them for entering into another bailout package from the IMF.
Pakistan’s foreign currency reserves had started depleting in the wake of rising current account deficit, and it had already evaporated around $4.5b in last few months after saying goodbye to the IMF.
Now, the reserves held by the SBP stood at $14.7b and around $4b forward booking the net reserves were just over $10b which could hardly meet three months import bill requirements.