ISLAMABAD - Pakistan expects to receive loan package from the friendly country China within next two weeks that would help in building the country’s foreign exchange reserves.

“China has not announced the loan package yet but we are expecting it will be finalized in next few days,” said an official of the ministry of finance. He said that government is expecting to receive $2-$3 billion from China. He has not disclosed the further details of the package by saying Chinese authorities had requested not to public the details before finalization of the package.

China would be third country which would provide loan to Pakistan after Saudi Arabia and United Arab Emirates (UAE). Pakistan is expecting to receive one billion dollar from Saudi Arabia in mid January, as it had already provided two billion dollars in last couple of months. Meanwhile, the UAE is likely to deposit the pledged amount of $ 3 billion in the State Bank of Pakistan (SBP)’s account next week. “Financing need for the current fiscal year is almost met due to the inflow from Saudi Arabia, UAE and China,” the official added. Financial gap for the ongoing financial year was projected at around $12 billion.

The country’s foreign exchange reserves would go beyond $11 billion after receiving the loans from friendly countries. Currently, the reserves are sharply depleting every week. “During the week ending 28th December 2018, SBP’s reserves had decreased by US$170 million to US$7,287.5 million, due to external debt servicing and other official payments,” the SBP said in an official handout.

On the other hand, the pressure on foreign exchange reserves would start easing after government avail defer oil payment facility. The deferred oil facility with Saudi Arabia might be complete and ready for signature in January. Once the draft has been agreed at the technical level, it will be signed by the ministers of both countries. As per proposed agreement, Pakistan will receive up to $3 billion worth of oil with payment deferred for 365 days in the first year of the agreement in 2018. The SBP will begin repayments to the Saudi Development Fund 12 months later, with monthly payments. Meanwhile, talks with UAE government are in an advanced stage for a similar agreement of up to $3 billion.