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Tuesday May 28, 2024

China's bank approves $700m in financing for Pakistan

Amount expected to be received this week by State Bank of Pakistan, says Finance Minister Ishaq Dar

By Business Desk
February 22, 2023
A Pakistani man waves Pakistani and Chinese national flags on a street of Karachi. — AFP/File
A Pakistani man waves Pakistani and Chinese national flags on a street of Karachi. — AFP/File

ISLAMABAD: The China Development Bank has approved $700 million in financing for Pakistan, Finance Minister Ishaq Dar announced on Wednesday.

This amount is expected to be received this week by the State Bank of Pakistan which will shore up its forex reserves, he wrote on Twitter.

The loan was expected as sources had indicated that the funds would be received.

On the issue of re-financing of commercial loans from Chinese banks, one top official of the government had informed The News that they were hopeful that all Chinese matured loans would be re-financed soon.

However, according to official sources, two more commercial loans were expected to be re-financed, including a $500 million and $800 million one.

So in totality, Pakistan is eyeing to get re-financing of Chinese loans up to $2 billion by the end of February or the first week of March 2023.

Pakistan is stuck in a dire balance of payment crisis and needs to secure the $1 billion tranche under the $6.5 billion Extended Fund Facility from the International Monetary Fund (IMF).

One of the demands of the global lender was that Pakistan needs to secure additional external financing avenues.

Apart from this, the IMF is also demanding slapping additional power surcharges and hiking the policy rate from Pakistan.