Pakistan receives $2.3b from China
ISLAMABAD – Pakistan has received much needed $2.3 billion from China on Friday, which would build the country’s depleting foreign exchange reserves.
“I am pleased to announce that Chinese consortium loan of RMB 15 billion (roughly $2.3 billion) has been credited into the SBP account today (Friday), increasing our foreign exchange reserves,” said Federal Minister for Finance and Revenue Miftah Ismail on Twitter. According to officials, China has agreed to reduce the interest rate on loan by one percent to 1.5 percent. The inflow of $2.3 billion would build the country’s foreign exchange reserves, which are depleting due to repayment against previous loans and financing of current account deficit. During the week ended on 17 June 2022, the State Bank of Pakistan (SBP) reserves decreased by $748 million to $8.237 billion mainly due to external debt repayments. The total liquid foreign reserves held by the country stood at $14.210 billion including $5.972 billion foreign reserves held by commercial banks. With the Chinese inflow, the SBP’s held reserves would increase t $10.537 billion. Apart from giving $2.3 billion, China has also decided to rollover its safe deposits — which were due in June-July. “I would like to thank China for this initiative even when Pakistan did not request them to do so,” the Finance Minister said the other day.