ISLAMABAD - As foreign exchange reserves are expected to deplete sharply in next couple of months due to financing of current account deficit and massive repayment of loans, the government is negotiating with China to borrow another $2 billion to maintain its reserves.

"The negotiations were started by the previous PML-N government and we hope to receive one to two billion dollars in next few weeks," said an official of the Ministry of Finance.

He further said that major area of concern for the economic managers is upcoming repayments of $2.5 billion loans due in next months. With this repayment, the reserves would further deplete, he added.

Sharing details, the official said that reserves would remain under pressure even in next fiscal year starting from July this year. He informed that Pakistan is also going to start repayment to International Monetary Fund (IMF), as the Islamabad will have to pay $190 million in June.

Meanwhile, another $490 million will become due in the coming fiscal year 2018-19 starting from July 1, 2018.

The caretaker government had already ruled out the possibility of talks with the IMF for a bailout programme. The country's reserves would remain under pressure without getting IMF's programme.

Similarly, the widening current account deficit is also depleting the reserves. The CAD has already widened to $14.03 billion during ten months (July to April) of the FY2018 as against the full year's target of $8.9 billion.

He informed that CAD is widening due to massive increase in imports, which were slowed down in last few years.  Sources said that efforts are underway to receive inflows from a state-owned Chinese Bank and would support declining foreign exchange reserves.  Pakistan had earlier received a $1billion loan from China at end-April that would be repaid in three years.

Pakistan has borrowed $9.6 billion from external sources only in ten months (July to April) of the current fiscal year. Keeping in view the current trend, the government is all set to break the previous year's record of borrowing around $10 billion in a single year.

Last year, the government had borrowed $10.2 billion from external sources as against the target of $8 billion. The borrowing can reach to $12 billion during entire current fiscal year.

The government had already massively borrowed from the commercial banks during ten months. Major part of the borrowing of $7.91 billion was from the commercial banks that recorded at $2.92 billion during ten months of the current fiscal year.

The government had projected only $1 billion borrowing from commercial banks during the entire ongoing financial year. However, the government had gone beyond the limit in just ten months to sustain its foreign exchange reserves.