KARACH, Oct 4: Pakistan had received $500 million in loan from the Asian Development Bank, a State Bank spokesman said on Saturday.

The ADB had approved a $1.5 billion loan last week to help Pakistan absorb the impact of high fuel and food prices.

Interestingly, the SBP also released foreign exchange reserves data that did not include the latest inflows but showed that the reserves had been depleted by $690 million in a week.

This is the first loan the PPP-led government has secured from any donor agency.

According to the terms of the loan, it would be utilised for initiating radical changes in the economy, particularly in the energy and agriculture sectors. However, the inflow is likely to support the currency market which has been witnessing a regular and steep fall in rupee-dollar parity.

Although the inflows are less than the outflows, the loan would help boost the market morale and could be a catalyst for change in the depressive sentiments prevailing for more than 10 months.

The data released on Saturday showed that the country’s reserves had fallen to $8.13 billion by Sept 27. More worrying is the depletion of the reserves of the central bank, which pays oil import bills. It reached $4.68 billion. However, cumulative reserves held by commercial banks increased to $3.45 billion.

“The inflow of $500 million will not make any major difference in the rupee-dollar parity. The rupee will continue to depreciate in the coming days,” said Mohammad Imran, research head at the First Capital Equity.

The rupee has lost over 23 per cent against the US dollar since January 2008. The country’s forex reserves, which were $16.5 billion in October 2007, are now just half of that figure.

Experts said that with the fall of oil prices in the international market, the government would find the $500 million quite valuable but the rising trade and current account deficits could lessen the positive impact.

The government had set a current account deficit of $14 billion for 2008-9 and it is yet to fill a financing gap of $7 billion. Efforts to secure Saudi oil facility have not yet yielded results while the government has also failed to persuade ‘friendly countries’ to extend soft-term loans.