Daily Times

Federal Minister for Finance and Revenue, Senator Mohammad Ishaq Dar said here on Wednesday that the Board of China Development Bank (CDB) has approved a US $700 million facility for Pakistan.

In a tweet, he said that the State Bank of Pakistan (SBP) was expected to receive this amount in the ongoing week which shore up the country’s forex reserve.

“Formalities completed and the 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,” he tweeted.

A finance ministry official told Reuters the loan was in addition to other facilities that China has already extended to Pakistan.

On the issue of re-financing of commercial loans from Chinese banks, one top official of the government said they were hopeful that all Chinese matured loans would be re-financed soon. However, according to official sources, two more commercial loans were expected to be re-financing including $500 million and $800 million. So in totality, Pakistan is eyeing to get re-financing of Chinese loans up to $2 billion by the end of February or the first week of March 2023.

Pakistan is stuck in a dire balance of payment crisis and needs to secure the $1 billion tranche under the $6.5 billion Extended Fund Facility from the International Monetary Fund (IMF). One of the demands of the global lender was that Pakistan needs to secure additional external financing avenues. Apart from this, the IMF is also demanding slapping additional power surcharges and hiking the policy rate from Pakistan.