[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]According to The News on Thursday, a Chinese bank has promised Pakistan that it will give another refinance loan of $500 million soon, bringing the total amount of commercial loans to $1.7 billion out of the total agreed amount of $2 billion.
Prior to negotiating a staff-level agreement with the International Monetary Fund, the Pakistani government is rushing from pillar to post to obtain 100% confirmation from favourable donor nations and multilateral creditors (IMF).
Pakistan was required to obtain the refinancing of commercial loans as well as a rollover on deposits from China during the programme duration, which is set to end in June 2023, as per an unwritten agreement with the IMF.
“Another $500 million commercial loan is coming from a Chinese bank,” a top official of the Finance Division confirmed on Wednesday and added that it would be done soon.
Also Read: Chinese bank grants Pakistan $700 million, according to Dar.
Chinese banks have already provided re-financing of $1.2 billion in commercial loans in the past few weeks, and now Beijing has given an assurance on another $500 million in loan re-financing in the next few days.
It is relevant to mention that Pakistan had also requested to grant rollover on the Chinese SAFE deposit of $2 billion within the ongoing month.
All these — the refinancing of commercial loans and rollovers on SAFE deposits — are pre-requisite for moving towards the signing of a staff-level agreement between the IMF and Pakistani side.
It is very difficult for the State Bank of Pakistan to increase its foreign exchange reserves up to $8–10 billion by the end of June 2023, even though the staff had projected them at $16–billion in August 2022, after finishing the seventh and eighth reviews under the $6.5 billion Extended Fund Facility. The guarantees for securing external financing are crucial for the sustainability of the IMF programme.[/vc_column_text][/vc_column][/vc_row]
