BackPakistan receives $700 mn from China bank amid economic crisis, eyes another $1,300 mn
Funds $700 million were received today by [the] State Bank of Pakistan from the China Development Bank, Finance Minister Ishaq Dar announced
PremiumPakistan has received a deposit of $700 million from the China Development Bank, which will provide a much-needed boost to the country's foreign exchange reserves. The deposit comes as Pakistan has been struggling with its external debt and has barely enough dollars to cover less than three weeks' worth of imports. Finance Minister Ishaq Dar announced the news on Twitter and referred to the deposit as a "lifeline" for Pakistan.
"AlhamdoLilah! Funds $700 million [were] received today by [the] State Bank of Pakistan from [the] China Development Bank," Finance Minister Ishaq Dar announced on Twitter
Earlier this week, Dar announced that the board of the China Development Bank had approved a loan facility for Pakistan worth $700 million, and the formalities had been completed. The loan will bolster the country's diminishing foreign exchange reserves, and the money is expected to arrive at the State Bank of Pakistan this week.
The coalition government has been trying to increase the country's foreign exchange reserves, which currently stand at $3.25 billion as of February 17. However, the delay in the revival of the $6.5 billion International Monetary Fund (IMF) programme has made it difficult for the government to achieve this goal, a Geo News report cites.
As per The News, in addition to this loan, Pakistan is also looking to refinance two more commercial loans worth $500 million and $800 million. In total, Pakistan is aiming to refinance Chinese loans up to $2 billion by the end of February or the first week of March 2023.
This deposit from China is expected to ease some of the pressure on Pakistan's economy, which has been struggling due to the pandemic and external debt.
Pakistan’s external debt servicing obligation for the ongoing fiscal year 2022-23 is $23 billion, of which $6 billion has been repaid and $4 billion rolled over, leaving $13 billion yet to be funded.
The country also has further repayment obligations of $75 billion during FY24-26.
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