Finance Minister Ishaq Dar confirmed that China last week rolled over a $2 billion loan to Pakistan for another year and dismissed media reports that the country was still waiting for the cash to arrive.
Speaking in the Senate today on a point raised by PPP leader Raza Rabbani, Dar said China has granted a one-year rollover of $2 billion in State Administration of Foreign Exchange (SAFE) deposits to Pakistan and the process is no longer pending.
According to the Finance Minister, the rollover occurred on March 23rd. He also stated that the documentation for the rollover has been completed and is no longer in the pipeline.
“The SAFE deposit is the sovereign business between the Chinese Central Bank and the State Bank of Pakistan (SBP). The second business of SBP is with other Chinese commercial banks, including ICBC, Bank of China, and China Development Bank,” he further clarified.
Dar’s comments come just a day after officials from Pakistan’s finance ministry told Reuters that the rollover was still in process.
Besides China, the country is hopeful that it will obtain financing from Saudi Arabia and the United Arab Emirates, despite the looming threat of default on various external debt maturities.
Pertinently, one of the requirements in the IMF is related to Net International Reserves (NIR), which can only be met after receiving assurances from friendly countries that a balance of payment gap will be filled.
Pakistan has assured the IMF that its foreign exchange reserves will be increased to $10 billion by the end of June. The lender wants the country to receive guarantees of up to $7 billion to cover the country’s balance of payments gap this fiscal year.
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