The net foreign exchange reserves with State Bank of Pakistan (SBP) showed an increase of $1.03 billion during the second and third weeks of February 2014 and provided a meaningful strength to rupee against dollar. Sources said that a considerable appreciation in rupee was largely due to an increase in net foreign exchange reserves with SBP; however, repeated queries by Business Recorder as to the source of these funds was given as ''multilateral and bilateral sources''.
Finance Ministry and Economic Affairs Division (EAD) remained tight lipped with respect to which multilateral and/or bilateral had injected what amount in the Pakistan Development Fund (PDF). Finance Minister Ishaq Dar said on Monday that the country''s foreign exchange reserves improved from US $7.59 billion on 7 February 2014 to US $9.37 billion on 7 Mar 2014 as a result of receipts from multilateral and bilateral resources. He also did not disclose the source of this rise in reserves.
According to statistics updated on the SBP website, however, net foreign exchange reserves were US $2.841 billion on February 7, 2014 and rose to $3.870 billion on February 21, 2014; and in the last week of February SBP reserves further increased by $50 million to $3.921 billion. When contacted an official of EAD said that the country has not received any grant from Saudi Arabia in the current fiscal year; however a grant of $100 million was announced in September 2013 by Engineer Yousef Ibrahim al-Bassam, Vice Chairman and Managing Director, Saudi Fund for Development (SFD). Accordingly, EAD has sought projects from the Planning and Development and Reform to be submitted to Saudi Arabia against the amount.
Pakistan and Saudi Arabia signed two loan agreements on February 17, 2014 under which the latter will provide a total of around US $183 million for the import of urea fertilizer from Saudi Arabia and the construction of a hydro-power project in Chitral. Under the first agreement, Saudi Arabia will provide a credit facility of US $125 million for the import of urea from Saudi Arabia. Whereas under the second agreement, Saudi Arabia will provide an additional loan of $57.8 million for the construction of a 106 MW Golen Gol hydro-power project at River Mastuj in Chitral.