Pakistan receives another 300 million dollars from China

KARACHI: The country’s total liquid foreign reserves fell by $515 million over the past week, mainly due to foreign debt servicing. However, Pakistan has received another $300 million worth of entry from China.

According to the State Bank of Pakistan (SBP), the total liquid foreign exchange reserves held by the country stood at $8.864 billion as of June 16, 2023 compared to $9.378 billion as of June 6, 2023.

During the analyzed week, the foreign exchange reserves of the SBP decreased by $482 million to $3,537 million from $4,0187 million due to the payment of the external debt. Similarly, the net foreign exchange reserves held by commercial banks also decreased by $32.6 million to reach $5.327 million during the last week.

Reserves, IMF deadline: a Chinese loan of 1 billion dollars was received

The country paid $1.3 billion worth of foreign debt to China over the past two weeks, however, as per the commitment to Pakistan, China refinanced it with Pakistan to build mobile foreign exchange reserves and avoid default.

Chinese business loans worth $1.3 billion were due in June. As scheduled, Pakistan repaid debt of $1 billion to the China Development Bank and $300 million to the Bank of China over the past two weeks.

At Pakistan’s request for expedited refinancing of $1.3 billion maturing business loans, China has refinanced it and out of the total amount, around $1 billion has been received during the last week while $300 has arrived during this week.

The SBP has also confirmed that it has received a $300 million commercial loan from the Pakistani government. However, these entries will be incorporated into the reserve position that will be published from June 23, 2023.

The Chinese inflows will help build the country’s foreign exchange reserves, but will also meet the International Monetary Fund’s condition of financing $6 billion for the release of the next tranche of the loan.

The Pakistani government is making continuous efforts for the release of the $1 billion IMF loan tranche and Prime Minister Shehbaz Sharif met with IMF Managing Director Georgieva on the sidelines of the New Deal Summit in Pakistan. Global Financing in Paris on Thursday and highlighted the economic challenges. He also requested the release of the Expanded Service tranche of the Fund.

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