June 03, 2022 (MLN): Pakistan will shortly receive $2.3 billion from China as Chinese banks have agreed to refinance the said amount in debt which would give some respite to the dwindling foreign exchange reserves of Pakistan, Finance Minister for Finance and Revenue informed on Thursday.
Taking to his Twitter handle, he said, “The terms and conditions for refinancing of RMB 15 billion deposit by Chinese banks (about US$ 2.3 billion) have been agreed.”
Inflow is expected shortly after some routine approvals from both sides. This will help shore up our foreign exchange reserves, he added.
Meanwhile, Saudi Arabia is also finalizing the extension of the kingdom's $3bn deposit to Pakistan.
Last year, Saudi Arabia deposited $3bn in Pakistan's central bank to help support its foreign reserves.
Pakistan is in dire need of external finances, hurt by high inflation, reserves declining to as low as less than two months of imports, and a fast-weakening currency.
Due to declining reserves, the country is facing severe consequences on the economic front in terms of losing investors’ confidence.
In recent talks with IMF, the fund had emphasized the need of removing fuel and energy subsidies to avail the next tranche under the Extended Fund Facility (EFF) program.
In order to avail funds from IMF, the government is on its toes to comply with IMF’s conditionality as it has increased an overall Rs60 per litre on petrol within a week.
At present, the current status of foreign exchange reserves is quite depressing as it stood at the lowest level of $15.77 billion, plummeting by $378 million or 2.3% WoW, the lowest since November 22, 2019.
However, after receiving the funds from China, Saudia, and IMF, Pakistan’s external outlook will become stable once again.
