ISLAMABAD, June 2: Federal Finance Minister Miftah Ismail has announced that China has agreed to refinance $2.3 loan for Pakistan – the money it had earlier withdrawn from Pakistan. Miftah said that inflow was expected “shortly” as soon as the formal step had been taken.
“Good News: The terms and conditions for refinancing of RMB 15 billion deposit by Chinese banks (about US$ 2.3 billion) have been agreed. Inflow is expected shortly after some routine approvals from both sides. This will help shore up our foreign exchange reserves,” the finance minister said in a tweet.
China was expected to roll over the loan in March when it matured but the money was withdrawn subsequently. The announcement about the Chinese loan comes in the wake of Foreign Minister Bilawal Bhutto Zardari’s visit to Beijing.
Officials from Pakistan and China held talks about the refinancing facility last week. Pakistan’s total foreign exchange reserves fell to $16.14 in the week that ended May 20, according to the data shared by the State Bank of Pakistan.
Out of these, the reserves with the central bank were $10.08b, down from $10.16b a week before. The commercial bank’s reserves went up by $63m from $5.99b to $6.06b. Pakistan is facing a balance of payment crisis with rising trade deficit and depleting reserves. The country is trying to secure funds from multilateral agencies and bilateral countries to shore up the reserves. Earlier this week, Saudi Arabia announced the extension of $3 billion deposit to Pakistan. Speaking to to news agency Reuters on the sidelines of the World Economic Forum in Davos, Saudi Minister of Finance Mohammed al-Jadaan said his country was finalizing the extension. -DNA
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