Staff Report
ISLAMABAD: Pakistan received $500 million from China as part of a 1.3-billion-dollar rollover facility.
Cash-strapped Pakistan has been facing growing economic challenges, including high inflation, plummeting forex reserves, the widening current account deficit, and the depreciating currency.
Finance Minister Ishaq Dar said, “formalities completed and the the Industrial and Commercial Bank of China (ICBC) approved rollover of 1.3 billion dollars facility which Pakistan had repaid to ICBC in recent months.
In his tweet, Dar said that the rollover from China would be disbursed in three installments as the first one of 500 million dollars has been received by the central bank of Pakistan. He said that “It will increase forex reserves!”.
Formalities completed & Chinese Bank, ICBC approved rollover of US$1.3 billion facility which has been repaid by Pakistan to ICBC in recent months. Facility will be disbursed in 3 instalments, first one of US$500 million has been received by SBP. It will increase forex reserves!
— Ishaq Dar (@MIshaqDar50) March 3, 2023
Pakistan’s foreign exchange reserves were at 3.8 billion dollars as of February 24, just enough for less than the month of imports, and after the exchange reserves hit an all-time low of 2.8 billion held by the central bank.
Dar revealed that China said that under the rollover facility, Pakistan expected an additional inflow of 500 million dollars in the “next few days.”
Highlighting the coalition government’s economic achievements, Dar said that foreign exchange reserves held by the State Bank of Pakistan climbed to 3.8 billion dollars from 2.8 billion dollars recorded last month. He said that the government returned 6.5 billion dollars of foreign debt during the current fiscal year.
He said that Pakistan had made payments of around 5.5 billion dollars (excluding the $1 billion sukuk payment). These included two billion dollars to China Development Bank and the ICBC, and 3.5 billion dollars to other countries.
He said that “debt was usually rolled over, but the debt stock does not reduce. We’re reducing debt stock,” “Formalities with ICBC were completed last night. We returned 1.3 billion dollars to it, and the facility has been renewed, and we would receive the amount back in three tranches,” he said.
Pakistan paid back 1.3 billion dollars.
“We paid back $1.3 billion in three tranches — $500 million, $500 million, and $300 million.
We will receive it back the same way. Pakistan will get $500 million in two-three days. We might receive it on Monday. Then we will get an additional $500 million in 10 days.”
