News Desk
ISLAMABAD: Amid a positive development, the State Bank of Pakistan-held (SBP) foreign exchange reserves registered a major push on Friday as the nation received $700 million from the China Development Bank (CDB), a local news channel reported citing sources.
Pakistan has been struggling to pay off its extraordinarily high levels of external debt and barely has sufficient dollars to cover less than three weeks’ worth of its imports and at such a critical time $700 million deposit from China will act as a lifeline for the cash-strapped country.
The incumbent government has been struggling to enhance SBP-held foreign exchange reserves, which currently stand at $3.25 billion as of February 17. However, amid the delay in the revival of the $6.5 billion International Monetary Fund (IMF) program, the government faced difficulty stabilizing the reserves.
State Bank of Pakistan
Earlier this week, Pakistan’s Minister for Finance Ishaq Dar announced that the board of the China Development Bank approved a loan facility for Pakistan worth $700 million, and the formalities in this regard have been completed.
Taking to his Twitter handle, Dar announced that the money, which would bolster the country’s diminishing foreign exchange reserves, is expected to arrive at the SBP this week.
Well-placed sources on Wednesday informed an English newspaper that the two more commercial loans are also expected to be re-financed, including $500 million and $800 million.
Pakistan also hopes to reach a staff-level agreement with the IMF this week. However, the global lender would need another month and a half before calling a board meeting and approving the $1.1 billion tranche.
Pakistan has taken painful fiscal consolidation measures to unlock funding from a $6.5 billion IMF bailout.
