Finance Minister Mifta Ismail said on Friday that a $2.3 billion loan from a consortium of Chinese banks has been deposited into the central bank’s account.
He said on Twitter, “I am pleased to announce that a Chinese consortium loan of RMB 15 billion (approximately $2.3 billion) has been credited to the State Bank of Pakistan (SBP) account today, enabling our foreign exchange The stock has increased.”
According to the central bank, its liquid foreign reserves stood At $14.21bn on 17 June, up from $8.99bn on 10 June.
This statement comes two days after Ismail announced That Chinese banks had signed a loan agreement with Pakistan. He also thanked the Chinese government for facilitating the transaction.
Foreign Minister Bilawal Bhutto-Zardari also thanked the Chinese leadership. He had said, ‘The people of Pakistan are grateful for the continued support of our all-time friends.
Since February, Pakistan has been demanding a rollover of very soon-to-be-expired loans to support the rapidly depleting foreign exchange reserves of the SBP.
Former Finance Minister Shaukat Tarin and current minister Ismail have repeatedly claimed that an agreement was reached for a debt rollover, but it did not materialize because Islamabad was in conflict with the divergent interests of the major powers – China and the United States. Standing in front About the Russo-Ukraine War.
during February visit For China from former Prime Minister Imran Khan, Pakistan sought a support package of around $20 billion. This includes a $4bn loan rollover, an expansion from the current $4.5bn in currency swaps to $10bn, and $5.5bn in additional financial support.
China rolled out about $2 billion about two months ago, but the rest of the stuff was swept under the carpet.
On 10 June, Islamabad again requested China for a $2bn loan rollover. In a recent public appearance, Ismail said that the government had received a letter from the Chinese government for loan rollover, but it took time to sign agreements with the respective banks.
Interestingly, Chinese and International Monetary Fund (IMF) loans worth $7bn-9bn were missed in the budget books for the 2022-23 fiscal year. The minister admitted in his post-Budget news conference that the under-reporting of these loans was a mistake that would be rectified.
Once taken into account, the foreign economic aid to Pakistan during the next financial year is estimated to be around $24 billion. Two Chinese safe deposit loans worth $1 billion are maturing this month and next.
China rolled out more than $2bn in SAFE deposit loans in March. These loans are mostly secured for raising foreign exchange reserves, budget support and project financing.