Islamabad, 25 January 2023 (GNP): With the lack of clarity over dates for the visit of the International Monetary Fund, Pakistan is bound to a $500 million amount as debt repayment to a Chinese commercial bank within 72 hours. This action is expected to push reserves below $4 billion without any new addition in reserves.
According to the Ministry of Finance of Pakistan, if the amount of 500 million dollars is paid within the next 72 hours, then another loan payment is due in the fourth week of February of $300 million to the same bank.
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Over the past two days, Pakistan paid off roughly $328 million in Chinese debt that the country had taken to set up power plants. Pakistan had previously requested China to roll over this debt, but China did not immediately agree. With the deadlines for debt repayments, the government hopes that it will be able to get new foreign commercial loans worth $1.5 billion in the current fiscal year.
After paying back the Chinese guaranteed debt, the foreign exchange reserves slipped to around $4.1 billion, and may fall close to $3.5 billion by the end of this week, if no immediate injection is received, said the sources.
