Pakistan to receive $2 billion loan from China by Monday
Cash-strapped Pakistan will receive over $2 billion loan from its "all-weather" ally China by Monday to provide a boost to its ailing economy, the former's Finance Ministry has announced. Ministry's official said that "all procedural formalities" for the transfer of $2.1 billion (15 billion yuan or Rs. 210 crores) loan by China have been completed and "the funds will be deposited by March 25."
Ministry's adviser and spokesperson Khaqan Najeeb Khan said that "all procedural formalities" for the transfer of $2.1 billion loan being provided by the Chinese government have been completed, and "the funds will be deposited in the State Bank of Pakistan's account by Monday, March 25", the Dawn newspaper reported. Pakistan has already received loans from Saudi Arabia and the UAE.
Pakistan received $1 billion each from the UAE and Saudi as part of the bailout packages by the two Gulf nations to help shore up Islamabad's dwindling foreign currency reserves. Saudi Arabia's assistance was part of the $6 billion bailout package, $3 billion balance-of-payments support and another $3 billion in deferred payments on oil imports, which Riyadh had agreed in October last year.
Islamabad is also in talks with the International Monetary Fund (IMF) for a bailout package. The loan facility "will further strengthen foreign exchange reserves and ensure the balance of payment stability," the spokesperson said. China agreed to provide financial assistance to Pakistan in a Beijing meeting last year. The meeting was held between Chinese Premier Li Keqiang and Prime Minister Imran Khan in November.
Following the meeting, China said it was willing to offer assistance to Pakistan to help it weather its current fiscal woes but the terms of such aid were still being discussed. Shortly after, Chinese Consul General Long Dingbin had said during an interview that in order to "boost Pakistan's economy", Beijing was investing in multiple sectors and launching business ventures instead of providing loans.
Earlier, Pakistan officials said that Islamabad would seek around $8 billion from the IMF, which would be the biggest package by the Fund for Islamabad. Although Pakistan has secured a breathing space from Saudi and UAE loans, an IMF program is essential to unlock access to resources from other multilateral lenders like World Bank and Asian Development Bank, as well as global capital markets.
