Pakistan signs $2.3 billion loan agreement with Chinese consortium of banks: Miftah

ISLAMABAD: Finance Minister Miftah Ismail said that Pakistan today signed a RMB 15 billion ($2.3 billion) loan facility agreement with a Chinese consortium of banks and the amount of loan will be released within days, which would stabilise depleting foreign exchange reserves and end depreciation of the local currency.

Finance Minister announced this development on his Twitter handle, revealing that the inflows are expected within a couple of days.

The Chinese consortium of banks has today signed the RMB 15 billion (~$2.3 billion) loan facility agreement after it was signed by the Pakistani side yesterday. Inflow is expected within a couple of days. We thank the Chinese government for facilitating this transaction.

— Miftah Ismail (@MiftahIsmail) June 22, 2022

Miftah said, “We thank the Chinese government for facilitating this transaction”.

The agreement with Chinese banks is expected to bolster the country’s reserves and enable it to make payments for imports while lending some support to the rupee as well which has lost over 34% since the start of the outgoing fiscal year 2021-22.

The development comes as a huge relief to economic policymakers after foreign exchange reserves held by the State Bank of Pakistan (SBP) fell below $9 billion as of June 10, with the level staying at less than six weeks of import cover.

Meanwhile, taking to his Twitter, Minister for Foreign Affairs Bilawal Bhutto-Zardari also acknowledged China for its support.

Bilawal wrote: “Grateful to President Xi Jinping, Foreign Minister Wang Yi and the people of China.”