Islamabad, 23 February 2023 (GNP): China Development Bank is to provide Pakistan with $700m by the end of February or first week of next month as revealed by Ishaq Dar, the Finance Minister of Pakistan.
He said on Twitter that the State Bank of Pakistan is anticipated to receive this sum this week, which it would use to bolster its foreign exchange reserves. The financing was anticipated because sources had said that the money would arrive.
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Ishaq Dar confirmed the news 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 Finance Ministry of Pakistan hopes to receive the loan from China soon. Furthermore, two more commercial loans, worth $500 million and $800 million each, were anticipated to be refinanced, according to reports. Pakistan hopes to restructure its Chinese debt totaling $2 billion by the end of February or the first week of March 2023.
For the record, Pakistan is in a severe balance of payments crisis and must obtain the $1 billion tranche from the IMF as part of the $6.5 billion Extended Financial Facility (IMF). The international lender made it a condition that Pakistan find new sources of outside funding. Moreover, the IMF is pressing Pakistan to raise its policy rate and apply new power levies.
