Finance Minister Ishaq Dar revealed late Friday that Pakistan had received $500 million from a Chinese bank as part of a $1.3 billion facility authorized by the Industrial and Commercial Bank of China (ICBC).
The cash-strapped nation has experienced increasing economic hardships, including soaring inflation, declining foreign exchange reserves, a growing current account deficit, and currency devaluation.
The finance czar tweeted, “Forms completed [and] Chinese Bank, ICBC granted rollover of $1.3 billion facility which has been returned by Pakistan to ICBC in recent months.
He stated that the facility would be paid out in three installments, with the State Bank of Pakistan has already received the first installment, worth $500 million. “That will boost foreign exchange reserves!” Dar included.
As of February 24, there were only $3.8 billion in foreign exchange reserves, or only enough to cover one month’s worth of imports. While the amount of readily available foreign exchange reserves is roughly $9 billion, $5.5 billion of which are net reserves held by commercial banks.
The finance minister said China had renewed a loan under which Pakistan anticipated an extra inflow of $500 million in the “coming few days” hours before making his announcement.
Dar emphasized the economic successes of the PDM-led government, noting that the SBP’s foreign exchange holdings increased from $2.8 billion last month to $3.8 billion this month. He insisted that during the current fiscal year, the government paid back $6.5 billion in foreign debt.
Apart from the $1 billion sukuk payment, Pakistan has paid out about $5.5 billion. Among them are $2 billion to the Chinese Development Bank and ICBC, as well as $3.5 billion donated to banks in other nations “said he.
“While debt is frequently renewed, its stock does not go down. We are lowering our debt level, “added said. “ICBC formalities were finished last night. We gave it back $1.3 billion, and because it was renewed, we will get the money back in three installments.”
“In three installments of $500 million, $500 million, and $300 million, we returned $1.3 billion. It will be returned to us in the same manner. In two to three days, Pakistan will receive $500 million.
We might receive it on Monday. Then we will get an additional $500 million in 10 days.”
