SBP receives $2.2bn under Chinese loan arrangement

Finance Minister Asad Umar said that hopefully, International Monetary Fund will soften its conditions for the bailout package to Pakistan, ahead of the IMF mission chief Ernesto Ramirez Rigo’s arrival in the country

KARACHI: The central bank on Monday announced that it had received $2.2 billion (15 billion Renminbi (RMB — also known as yuan) from China.

Finance ministry adviser and spokesperson Dr Khaqan Hassan Najeeb confirmed the development to the media .

Dr Najeeb had earlier said that “all procedural formalities” for the transfer of the loan being provided to Pakistan by the Chinese government have been completed, and “the funds will be deposited in the SBP account by Monday, March 25”.

The loan facility, the spokesperson had said, “will further strengthen foreign exchange reserves and ensure balance of payment stability.”

Following a meeting in Beijing between Chinese Premier Li Keqiang and Prime Minister Imran Khan in November 2018, China had said that it was willing to offer assistance to Pakistan to help it weather its current fiscal woes, but that the terms of such aid were still being discussed.

Shortly after, Chinese Consul General Long Dingbin had said during an interview that in order to “boost Pakistan’s economy”, Beijing is investing in multiple sectors and launching business ventures instead of providing loans.

In February this year, in response to a Financial Times report which said that China had pledged to lend at least $2bn to Pakistan to shore up its foreign exchange reserves and prevent further devaluation of the rupee against the dollar, Chinese foreign ministry spokesman Lu Kang had tentatively acknowledged that it was extending financial assistance to help Pakistan.

“The Chinese side has offered and will continue to offer its best through assistance, trade, investment and all-around practical cooperation to support and boost Pakistan’s economic and social development,” Kang had said.

After receiving the Chinese loan, the foreign exchange reserves held by the SBP had hit the double-digit mark of $10.67 billion while total reserves of the country had crossed $17 billion. Net foreign exchange reserves held by commercial banks stood at $6.91 billion.

Hope to convince IMF on softening bailout conditions, says Umar

Finance Minister Asad Umar said that hopefully, International Monetary Fund will soften its conditions for the bailout package to Pakistan, ahead of the IMF mission chief Ernesto Ramirez Rigo’s arrival in the country.

Rigo is expected to arrive in Pakistan on Monday night and will be meeting the finance minister tomorrow to discuss the prospects of the bailout package, said sources.

The IMF chief will also meet with a team of SBP to get a briefing on the economic condition of the country.

The finance minister in a recent event, earlier, said that the government has managed to bridge the gap with the International Monetary Fund.

 

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