China rolls over $1bn SAFE deposits for a year

ISLAMABAD: China has granted a rollover of $1 billion SAFE deposits for a year, so the foreign exchange reserves held by the State Bank of Pakistan (SBP) will remain unchanged at $8.7 billion.

Under the financing arrangement agreed with the IMF in line with the $3 billion Standby Arrangement (SBA), there was a requirement for securing the rollover of deposits from bilateral partners, especially from China, the Kingdom of Saudi Arabia and the United Arab Emirates (UAE) in order to keep the foreign exchange reserves held by the SBP at comfortable levels.

A top official of the Finance Division confirmed to The News on Tuesday night that China had granted a rollover of $1 billion SAFE deposits so there would be no decrease in the foreign exchange reserves of the SBP.

China had already granted a rollover of $1 billion in SAFE deposits in the last financial year ending on June 30, 2023. This $1 billion SAFE deposit was scheduled to mature in the third week of the ongoing month, so now Beijing has granted its rollover.

According to official documents, Pakistan was scheduled to repay $1.033 billion as a principal amount of $1 billion and an interest payment of $33 million in July 2023. Now this principal amount of $1 billion has been rolled over by China.

Pakistan had also requested for granting a rollover of a non-guaranteed dent of $2.077 billion from China with the hopes of getting it for two years.