Another refinanced $500 million loan from a Chinese bank has been promised, bringing the total commercial loans to $1.7 billion out of the total committed amount of $2 billion.
On Wednesday, a top Finance Division official said, “Another $500 million commercial loan is coming from a Chinese bank,” News International reported.
Notably, Pakistan had also asked for permission to give a rollover on the Chinese SAFE deposit of USD 2 billion during the current month.
These are the prerequisites for signing a staff-level agreement between the International Monetary Fund (IMF) and the Pakistan government.
Authorities in Pakistan are currently eagerly expecting approval from the Kingdom of Saudi Arabia, the United Arab Emirates, and Qatar, as well as the World Bank and the AIIB, to satisfy their external financing requirements for the remainder of the current fiscal year.
It is difficult for the State Bank of Pakistan to boost its foreign exchange reserves to $8–10 billion by the end of June 2023, despite predictions of $16 billion in August 2022, which is why the guarantees for securing external funding are essential for the sustainability of the IMF programme.
Earlier in February, Pakistan’s reserves reached a low level of less than $ 3 billion facing the country with substantial financial problems.
On the other hand, IMF put harsh conditions on the country to boost its financing. The country initiated several measures to meet the IMF conditions, including the rise in petrol and commodities price and an austerity campaign among government officials.
The strict measures led to the high inflation gone up to 31.5 per cent in the country and faced the people of Pakistan with tremendous difficulties amid a financial crisis.