- Miftah Ismail, the finance minister, tweets about the agreement.
- He said that within a few days, inflows are anticipated.
- We appreciate the Chinese government making the process easier, Miftah says.
ISLAMABAD: Pakistan inked a loan arrangement with a group of Chinese banks for RMB 15 billion ($2.3 billion) on Wednesday. This lending facility is intended to help Pakistan’s currency depreciate and replenish its dwindling foreign exchange reserves.
On his Twitter account, Finance Minister Miftah Ismail hailed the development and mentioned that inflows are anticipated in a few days.
The Chinese consortium of banks has today signed the RMB 15 billion (~$2.3 billion) loan facility agreement after it was signed by the Pakistani side yesterday. Inflow is expected within a couple of days. We thank the Chinese government for facilitating this transaction.
— Miftah Ismail (@MiftahIsmail) June 22, 2022
He remarked, “We applaud the Chinese government for enabling this transaction.
The arrangement with Chinese banks is anticipated to increase the nation’s foreign exchange reserves, enable it to pay for imports, and provide some support for the rupee, which has fallen almost 34 percent since the beginning of the current fiscal year 2021–2022.
Economic officials are very relieved by the result after the State Bank of Pakistan’s (SBP) foreign exchange holdings dipped below $9 billion as of June 10 and remained at a level below six weeks’ worth of import coverage.
Thanks to China, FM Bilawal.
Federal Minister for Foreign Affairs Bilawal Bhutto-Zardari also thanked China for its assistance on Twitter.
“Thankful to President Xi Jinping, Foreign Minister Wang Yi, and the people of China,” Bilawal added.
Grateful to President Xi Jinping, Foreign Minister Wang Yi and the people of China 🇨🇳. Chinese consortium of banks has today signed the RMB 15 billion loan facility agreement, the people of Pakistan are grateful for the continued support of our all weather friends. pic.twitter.com/ZMjocIOBcV
— BilawalBhuttoZardari (@BBhuttoZardari) June 22, 2022
The people of Pakistan are appreciative of our all-weather allies’ ongoing assistance, he continued.
Pakistan and IMF reach a wide agreement
The revelation was also a lifeline for the nation, which is still in negotiations with the IMF over the restart of an Extended Fund Facility that has halted and is already in a precarious economic condition.
To increase the Federal Board of Revenue (FBR) aim and reduce spending to generate a revenue surplus in the upcoming fiscal year, Pakistan and the IMF came to a wider agreement last night on the budget for the fiscal year 2022–2023
Esther Perez Ruiz, the IMF’s resident representative in Pakistan, subsequently stated that negotiations with Pakistan are ongoing and significant progress has been achieved on the budget for the upcoming fiscal year.
China consents to finance Pakistan again
Chinese banks have committed to refinancing Pakistan with $2.3 billion in loans, which will “shore up Pakistan’s foreign currency reserves,” Miftah had stated earlier this month.
Good News: The terms and conditions for refinancing of RMB 15 billion deposit by Chinese banks (about US$ 2.3 billion) have been agreed. Inflow is expected shortly after some routine approvals from both sides. This will help shore up our foreign exchange reserves.
— Miftah Ismail (@MiftahIsmail) June 2, 2022
Miftah posted the following on his Twitter account: “good tidings The terms and circumstances for the refinancing of the RMB 15 billion (about $2.3 billion) deposit made by Chinese banks have been agreed upon.”