Central and West Asia
Sum of Measures 1—5 (Total Package)
|Measure||Amount (Local)||Amount (USD)||Details||Update||Source|
|01 - Liquidity Support info_outline||PKR100,000,000,000||USD602,653,968|
|01A - Short-term lending info_outline||PKR100,000,000,000||USD602,653,968||
August 19, There is an increase in the limit of refinancing provided to banks under the Exports Finance Scheme by PKR100 billion [update].
|01B - Support policies for short-term lending info_outline|
|01C - Forex operations info_outline|
|02 - Credit creation info_outline||PKR426,205,000,000||USD2,568,541,342|
|02A - Financial sector lending/funding info_outline||PKR396,150,000,000||USD2,387,413,692||
The State Bank of Pakistan's (SBP's) refinancing facilities: (i) March 17, Refinance Facility for Combating COVID-19 (RFCC) to support hospitals and medical centers to purchase equipment to detect, contain, and treat COVID-19 (3% end-user rate for 5 years). Peak approved financing amounted to PKR6.504 billion (September 10) [update]. July 6, SBP enhances scope of refinance facility to support health facilities, now allowing manufacturers of protective gears and equipment, including items such as masks, dresses, testing kits, hospital beds, ventilators etc. to avail financing under RFCC. Moreover, to cope with the rising needs of the health facilities in general in the country, SBP has allowed hospitals serving patients even other than COVID-19 to avail this facility; (ii) Temporary Economic Refinancing Facility (TERF) to stimulate investment in new manufacturing plants and machinery (7% for 10 years with a total size of PKR100 billion). May 8, SBP allows financing for Balancing, Modernization and Replacement (BMR) and expansion under its Temporary Economic Relief Facility (TERF) to provide further stimulus to the economy in the context of COVID-19's impact on the economy, to support investment in the country for modernizing or expanding manufacturing/production units. As of September 10, Approved financing amounted to PKR61.994 billion [update]; (iii) Refinance scheme (SBP Rozgar scheme) to support employment and prevent layoff of workers (to finance 3 months of wages; loan repayment will start from January 2020 and can be made in equal 24-month or 8-quarter installments). Under the Refinance scheme to support employment and prevent layoff of workers, SBP enhanced its refinance limits to finance up to 100% of wages and salaries of businesses with average 3-month wage bill of up to PKR500 million. June 30, SBP has decided to extend the Rozgar scheme for another three months and, in collaboration with the Government of Pakistan, has increased the risk coverage for SMEs under the scheme. As of September 4, Approved financing amounted to PKR199.646 billion [update]; (iv) August 19, To promote export-oriented investment, PKR90 billion has been allocated under the Long Term Financing Facility (LTFF) [update].
|02B - Support policies for long-term lending info_outline||PKR55,000,000||USD331,460||
(i) No amount/estimate: The SBP has responded to the crisis by cutting the policy rate: from 13.25% to 12.5% on March 17, 11% on March 24, 9% on April 16, 8.0% on May 15, and 7% on June 25; (ii) SBP introduced temporary regulatory measures to maintain banking system soundness and sustain economic activity, as follows: (a) reducing the capital conservation buffer by 100 basis points to 1.5%, (b) increase the regulatory limit on extension of credit to SMEs by 44% to PKR180 million ((PKR180 million/1.44) = PKR125 million; PKR180 million - PKR125 million = PKR55 million), (c) relaxation of the debt burden ratio for consumer loans from 50% to 60%, (d) relaxation of regulatory criteria for restructured/rescheduled loans for borrowers who require relief beyond the extension of principal repayment for one year, and (e) May, Suspension of bank dividends for the first two quarters of 2020 to shore up capital; (iii) July 8, SBP has reduced the end user markup rates on Temporary Economic Refinance Facility to 5% from the existing 7% and on Long Term Financing Facility (LTFF) for non-textile sector to 5% from 6%.
|02C - Loan guarantees||PKR30,000,000,000||USD180,796,190||
May 6, Under the SBPs Refinance Scheme to Support Employment and Prevent Layoff of Workers, the Ministry of Finance has stepped forward to shoulder risk sharing with banks. The Federal Government has allocated PKR30 billion under a credit risk sharing facility for the banks spread over four years to share the burden of losses due to any bad loans in future. Under this risk sharing arrangement, the Federal Government will bear 40% first loss on principal portion of disbursed loan portfolio of the banks.
|03 - Direct long-term lending info_outline||PKR833,152,000,000||USD5,021,023,584|
|03A - Long-term lending info_outline|
|03B - Forbearance||PKR833,152,000,000||USD5,021,023,584||
(i) April 20, Borrowers from corporate, consumer, agriculture, SMEs, and microfinance sectors can avail deferment of principal amount for one year while continue servicing mark up. July 7, the State Bank of Pakistan extends the availability of deferment of principal amount of loans facility until September. This applies to Small & Medium Enterprise Financing, Consumer Financing, Housing Finance, Agriculture Finance and Micro financing only. The facility is not being extended to corporates and commercial borrowers since a significant amount of their loans and advances has already been deferred. August 10, the SBP relief package for microfinance banks, which included deferment of principal and restructuring of microfinance loans to deal with the adverse implications of the ongoing COVID-19 pandemic, have been expanded with additional measures. First, the relief measures that were earlier available from Feb 15, 2020 have now been allowed to borrowers who were regular on December 31, 2019. Second, to facilitate microfinance banks (MFBs) during these testing times, the provisioning requirements have been extended by 2 months; and third, client’s consent through recorded lines has been allowed to facilitate the customers to avail the relief package. As of September 11, PKR183.694 billion was the amount approved for restructuring/rescheduling, while PKR649.458 billion was the amount of principal approved for deferment up to one year [update]; (ii) No amount/estimate: SBP extends time for settlement of foreign currency loans amid COVID-19 pandemic. Banks can now allow extension up to 180 days to exporters in settlement of their FE-25 loans in case they are facing delay in realization of export proceeds due to COVID-19.
|04 - Equity support info_outline|
|05 - Government support to income/revenue||PKR1,200,000,000,000||USD7,231,847,611||
(i) March 24, A relief package worth PKR1.2 trillion has been announced by the federal government: (a) PKR200 billion relief to daily wage workers, including PKR75 billion of approved cash disbursements to 6.2 million workers; (b) PKR150 billion, cash transfers to 12 million low-income families; (c) PKR100 billion, accelerated tax refunds to the export industry; (d) PKR100 billion, financial support to SMEs, in the form of relief on electricity bill payments, bank lending support, and subsidies and tax incentives; (e) PKR280 billion, resources for an accelerated procurement of wheat; (f) PKR50 billion, financial support to utility stores; (g) PKR70 billion, relief in fuel prices; (h) PKR110 billion, electricity bill payments relief; (i) PKR100 billion, emergency contingency fund; (j) PKR25 billion, Transfer to the National Disaster Management Authority (NDMA) for the purchase of necessary equipment to deal with the pandemic; (k) PKR15 billion total support for health and food supplies; (ii) June 10, The Economic Coordination Committee approved an amount of PKR480.566 million (part of the fiscal stimulus package) to cover the risk allowance of health care workers performing duties related to COVID-19; (iii) June, PKR50 billion agriculture package for farmers and crop growers (part of the PKR1.2 trillion package), likely consisting of reduction of electricity tariff for tube-wells, reduction of import duty on fertilizers, reduction of mark-up and waiver of agricultural loans, and deregulation of the import and export of agricultural products and livestock; (iv) The FY 2021 budget includes further tariff and custom duty reductions on food items, a PKR70 billion allocation for ‘COVID-19 Responsive and Other Natural Calamities Control Program’, as well as the provision of tax incentives to the construction sector to address the acute employment needs generated by the lockdowns.
|05A - Health|
|05B - Non-health|
|06 - Budget reallocation info_outline|
|07 - Central bank financing government|
|07A - Direct lending & reserve drawdown|
|07B - Secondary purchase: government securities|
|08 - International Assistance Received||PKR828,437,257,347||USD4,992,610,000|
|08A - Swaps info_outline|
|08B - International loans/grants||PKR828,437,257,347||USD4,992,610,000|
|08B1 - Asian Development Bank||PKR193,246,881,747||USD1,164,610,000||
(i) March 23, USD0.01 million Preparing Health Sector Assessment (ii) March 30, USD2 million COVID-19 Emergency Response (Grant 0694-PAK); (iii) April 7, USD30 million National Disaster Risk Management Fund (loan; repurposing of ongoing projects); (iv) April-May, USD327.34 million [update] Trade Finance Program (Additional Financing), Guarantee (with USD198.97 million co-financing); (v) April, TA 9950-REG: Regional Support to Address the Outbreak of COVID-19 and Potential Outbreaks of Other Communicable Diseases, Pakistan USD3 million (estimated support); (vi) May 19, USD300 million loan to help mitigate COVID-19 impacts; (vii) May 29, USD1 million Capacity Building of Disaster Management Institution; (viii) June 3, USD0.07 million Developing A Disaster Risk Transfer Facility in the Central Asia Regional Economic Cooperation Region (additional financing); (ix) June 10, USD500 million COVID-19 Active Response and Expenditure Support Program; (x) July 7, USD0.30 million Preparing the Trade Competitiveness Program (Additional Financing); (xi) July 7, USD0.30 million Capacity Building of Disaster Management Institution (Additional Financing); (xii) July 13, USD0.38 million Addressing Health Threats in the Central, West and East Asia Region; (xiii) July 24, USD0.21 million Due Diligence and Capacity Development of Trade Finance Program Banks (Subproject 3).
|08B2 - Other||PKR635,190,375,600||USD3,828,000,000||
(i) April 2, World Bank Pandemic Response Effectiveness Project (PREP): (a) USD200 million concessional credit provided through the COVID-19 Fast-Track Facility, and (b) USD38 million, repurposed from existing projects; (ii) April 16, IMF Executive Board approves USD1.386 billion disbursement to Pakistan to address the COVID-19 pandemic under the Rapid Financing Instrument; (iii) May 21, USD500 million World Bank's Securing Human Investments to Foster Transformation will support policy reforms to help Pakistan’s COVID-19 emergency response and protect human capital investments (30-year loan with a 5-year grace period); (iv) As of May 29, nearly USD18 million in total assistance, which includes USD5 million contribution by USAID to the agreement between the Department of International Development of the United Kingdom with the Government of Pakistan to support its emergency cash-assistance program, USD10 million in health assistance, and USD2.9 million from the Migration and Refugee Assistance account to help vulnerable people; (v) June 16, USD500 million COVID-19 Active Response and Expenditure Support (CARES) Program, Asian Infrastructure Investment Bank (AIIB); (vi) June 23, USD236 million Most Vulnerable Households in Balochistan and Khyber Pakhtunkhwa to Benefit from Improved Learning, Healthcare and COVID-19 Response, World Bank; (vii) June 29, USD500 million from the World Bank's Resilient Institutions for Sustainable Economy, which aims to bolster fiscal resilience and COVID-19 recovery (loan); (viii) July 16, USD250 million Resilient Institutions for Sustainable Economy (RISE) program of AIIB, which constitutes one element of Pakistan’s response to and recovery from the impact of COVID 19 pandemic; (ix) July 31, USD200 million from the World Bank for the Actions to Strengthen Performance for Inclusive and Responsive Education Program (ASPIRE), which will address school disruptions due to COVID-19 by accelerating virtual and distance learning opportunities for students.
|09 - International Assistance Provided|
|09A - Swaps info_outline|
|09B - International loans/grants|
|10 - No breakdown|
|11 - Other Economic Measures||
(i) Provincial governments have also announced fiscal measures, broadly consisting of cash grants to the low-income households, tax relief and additional health spending that includes increased compensation to healthcare workers. The government of Punjab, announced a tax relief package of PKR18 billion and a cash grants program of PKR10 billion, while the government of Sindh has announced a cash grant and ration distribution program of PKR1.5 billion for the low-income households; (ii) Elimination of the import duties on imports of emergency health equipment; (iii) June 10, The State Bank of Pakistan has announced an elaborate arrangement of teams of focal persons who will be responsible to address isues faced by businesses in availing the financing under the SBP ROZGAR scheme (refinance schemes for payment of wages and salaries to prevent layoffs); (iv) June, Allowing banks to approve an Electronic Import Form (EIF) for the import of equipment donated by international donor agencies and foreign governments.
|12 - Non-Economic Measures||
(i) Quarantines in localized areas; (ii) Closed borders with neighboring countries; (iii) International travel restrictions; (iv) School and university closures; (v) Cancellation and banning of public events; (vi) Social distancing measures; (vii) Varying levels of lockdown in cities and provinces across the country; (viii) The federal government in coordination with provinces had partially eased the lockdown since April 15, by allowing ‘low-risk industries’ to restart operation with newly developed Standard Operating Procedures (SOPs). This partial lockdown will be further eased on May 9, to allow the opening of several industrial units and small retail shops in phases and using proper SOPs. Educational institutes are expected to reopen starting July 15; (ix) May 19, The Supreme Court ordered the government to lift some remaining restrictions imposed on business, in particular shopping malls be reopened and curbs to be lifted on business opening on the weekends; (x) May 29, The country resumes international flight operations; (xi) June 2, the government announced that all the businesses would be open except the ones that are considered in the negative list; (xii) July 27, Strict lockdown imposed in Punjab for 10 days; (xiii) August 4, Balochistan will extend the lockdown until August 17.