Pakistan’s central bank said on Wednesday it had received $468 million from the United States in compensation for some of its costs in battling militancy.
The US embassy in Islamabad said on Tuesday it had released $656 million to Pakistan from its so-called coalition support fund (CSF) for some costs incurred last year, with $188 million transferred last week and another $468 million on Monday.
“We received $468 million last night,” said Syed Wasimuddin, chief spokesman for the State Bank of Pakistan.
The bank said on Tuesday it had received the first $188 million last Friday.
The CSF is a US programme to reimburse allies that have incurred costs in supporting counter-terrorist and counter-insurgency operations.
Pakistan’s role in the battle against militants has been highlighted in recent days with the arrest in the United States of a Pakistani-American in connection with a botched car bomb in New York’s Times Square.
The US funds come at an important time for cash-strapped Pakistan which is in negotiations with the International Monetary Fund (IMF) for the release of a fifth tranche of an $11.3 billion loan.
The IMF board is expected to meet in mid-May to consider the fifth tranche of the loan, worth about $1.15 billion. The IMF has been pressing Pakistan to increase electricity tariffs and implement a value-added tax.
The central bank said the $188 million will be reflected in foreign exchange data to be released on Thursday, covering the week that ended on April 30. The remaining $468 million will be reflected in data to be released next week.
Foreign exchange reserves eased to $14.98 billion in the week that ended on April 23.
Foreign reserves hit a record high of $16.5 billion in October 2007 but fell steadily to $6.6 billion by November 2008, largely because of a soaring import bill.