Crisis-hit Pakistan has communicated to the International Monetary Fund (IMF) and requested China to roll out its USD 2 billion deposits for another year, a media report said on Tuesday. The country still awaits a much-needed USD 1.1 billion tranche of funding from the global lender.
According to a report, the Finance Ministry and State Bank of Pakistan shared their external financing plan in virtual talks with IMF on Monday to strike a staff-level agreement with the Washington-based lender.
"We have already made the request to the Chinese side for granting rollover of USD 2 billion State Administration of Foreign Exchange (SAFE) deposits, which is going to mature by the end of the ongoing month,” said sources as quoted by The News International newspaper.
Pakistan communicated to the IMF its plans to raise its dwindling foreign exchange reserves to USD 10 billion by the end of June, as per PTI reports.
A top official source said that the revival of the IMF deal will enable Islamabad to muster up the required dollar funding from all possible avenues, including multilateral, bilateral, and commercial financing as well as getting rollover of upcoming China’s SAFE deposits to the tune of USD 2 billion.
The total Chinese SAFE deposits stood at USD 4 billion, and the remaining are due to mature in a few months. Another official said China gave verbal assurance of approving the rollover of the USD 2 billion SAFE deposits.
Pakistan informed the IMF about implementing various measures on the Fund's request for the release of the USD 1.1 billion tranche under the USD 7 billion loan facility. It suggested that both sides should now move towards signing the staff-level agreement (SLA) without wasting further time.
Last month, Pakistan Finance Minister Ishaq Dar said that external financing confirmation was not part of the prior action of the IMF for signing a staff-level agreement. He added that both sides agreed that the Fund would help Islamabad secure its confirmation on external financing needs.
Pakistan received USD 700 million from all-weather ally China last month to help its ailing economy before the finalization of talks with the IMF for financial assistance. It is set to receive another USD 1.3 billion from Beijing to shore up its fast-depleting forex reserves, Finance Minister Ishaq Dar said last week.
Pakistan and the IMF have been holding virtual talks after the two sides held 10 days of intensive negotiations with an IMF delegation in Islamabad from January 31 to February 9, which failed to reach an agreement on the USD 1.1 billion tranches of funding from the global lender.
(With PTI inputs)
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