Pakistan awaits China’s decision on rollover of $2bn loan: Official:
China’s decision on the rollover of the $2bn loan:
A top finance ministry official informed Reuters that China is currently working on Pakistan’s request to roll over a $2-billion loan that reached maturity last week.
Pakistan’s foreign exchange reserves have decreased to the point where they only cover four weeks’ worth of imports, and the loan rollover is crucial for the country.
Additionally, Pakistan is in negotiations with the International Monetary Fund (IMF) to secure bailout funds.
The official stated that they are currently processing formal documentation for the loan rollover, which is still a work in progress.
The source also mentioned that a formal announcement will be made, but did not provide any additional details.
The loan reached maturity on March 23.
Pakistan is currently facing difficulties in meeting its financial obligations, and the only assistance it has received so far is from China.
China refinanced $1.8 billion
China has refinanced $1.8 billion which is credited to the State Bank of Pakistan (SBP).
In order to access other sources of external financing, it is crucial for Pakistan to secure funding from the International Monetary Fund (IMF).
Negotiations are ongoing since early February to resume the $1.1 billion in funding that held since November.
Since early February, the parties negotiated to resume the $1.1 billion in funding that held since November.
One of the conditions that the lender has set for releasing the tranche is obtaining an assurance for external financing to support Pakistan’s balance of payments.
Recently, the Pakistani government announced that they have made progress in securing external financing from Saudi Arabia and the United Arab Emirates (UAE).
Minister of State for Finance and Revenue Statement
Minister of State for Finance and Revenue Dr. Aisha Ghaus Pasha made the statement before a parliamentary panel on the same day that the UAE’s ambassador in Islamabad, Hamad Obaid Ibrahim Salim Al-Zaabi, met with Finance Minister Ishaq Dar and expressed interest in augmenting and furthering investment in various sectors of Pakistan’s economy.
Dr. Pasha testified before the Senate Standing Committee on Finance and spoke to journalists, stating that there has been progressing from Saudi Arabia and UAE on external financing.
This is the only pending matter after the completion of technical negotiations.
She added that there are indications that something will be coming very shortly, and the issues with the IMF are close to settlement as the IMF was looking for commitments from brotherly countries.
However, a trust deficit had been delaying the SLA with IMF.
Also, When asked about Pakistan’s external financing needs, Dr. Pasha replied that they were higher, but support from friendly countries, followed by the IMF tranche, would unblock flows from other multilateral agencies and help move towards normalcy.
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