ISLAMABAD: Finance Minister Ishaq Dar announced on Wednesday that the China Development Bank has approved $700 million in financing for Pakistan.
This sum is expected to be received by the State Bank of Pakistan this week, bolstering its forex reserves, he wrote on Twitter.
Formalities completed and Board of China Development Bank has approved the facility of US $ 700 million for Pakistan. This amount is expected to be received this week by State Bank of Pakistan which will shore up its forex reserves!— Ishaq Dar (@MIshaqDar50) February 22, 2023
The loan was anticipated because sources said the funds would be received.
Concerning the re-financing of commercial loans from Chinese banks, a top government official told to media that they were hopeful that all Chinese matured loans would be re-financed soon.
However, two more commercial loans, worth $500 million and $800 million, were expected to be refinanced, according to official sources.
In total, Pakistan hopes to re-finance Chinese loans worth up to $2 billion by the end of February or the first week of March 2023.
Pakistan is in a dire balance-of-payments crisis and must secure the $1 billion tranche under International Monetary Fund’s $6.5 billion Extended Fund Facility (IMF).
One of the global lender’s demands was that Pakistan secures additional external financing avenues.
Aside from that, the IMF is requesting that Pakistan impose additional power surcharges and raise the policy rate.