Finance Minister Ishaq Dar reported on Wednesday that the Board of China Development Bank has authorized a $700 million facility for Pakistan, adding to the country’s foreign exchange reserves.
Finance Minister Dar tweeted that the processes have been completed and that the State Bank of Pakistan will receive the money this week, boosting its foreign exchange reserves.
The loan was expected because sources had said that the money would receive.
One top government official told that they were hopeful that all Chinese matured loans would be refinanced shortly in relation to the topic of re-financing commercial loans from Chinese banks.
But, two other commercial loans totaling $500 million and $800 million were anticipated to be refinanced, according to official sources.
Pakistan hopes to restructure its Chinese debt totaling $2 billion by the end of February or the first week of March 2023.
Pakistan is in a severe balance of payments crisis and must obtain the $1 billion tranche from the IMF as part of the $6.5 billion Extended Financial Facility.
The international lender made it a condition that Pakistan finds new sources of outside funding. In addition, the IMF is pressing Pakistan to raise its policy rate and apply new power surcharges.