Pakistan’s finance minister Miftah Ismail said on Friday that a $ 2.3 billion loan from a consortium of Chinese banks had been paid into the central bank account.
On Twitter, Ismail wrote: “I am pleased to announce that the Chinese consortium loan of RMB 15 billion (approximately $ 2.3 billion) has been credited today to the State Bank of Pakistan (SBP) account, increasing our reserves of currency “.
To deal with the country’s declining cash reserves, Ismail said earlier that a $ 2.3 billion loan was expected from a consortium of Chinese banks in Pakistan in a “couple of days”.
In particular, a Chinese consortium of banks and Pakistan had previously signed a $ 2.3 billion loan deal. In an update to the deal on Wednesday, Pakistan’s finance minister Miftah Ismail said cash inflows under the loan deal were expected in a few days.
On Twitter, Ismail had written: “The Chinese banking consortium has today signed the RMB 15 billion (~ $ 2.3 billion) loan agreement after it was signed by the Pakistani side yesterday. An entry is expected in a a couple of days. We thank the Chinese government for facilitating this transaction. “
Pakistani Foreign Minister Bilawal Bhutto Zardari wrote on social media: “Thank you to President Xi Jinping, Foreign Minister Wang Yi and the people of China. The Chinese banking consortium has signed today the loan agreement of 15 billion RMB, the people of Pakistan are grateful. for the continued support of our friends all the time. “
Pakistan is in a deep financial crisis and this development comes after reports have emerged that Pakistan has reached an agreement with the International Monetary Fund (IMF), according to the media. Ismail said that after a visit by Foreign Minister Bilawal Bhutto-Zardari, following talks by Prime Minister Shehbaz Sharif with Prime Minister Li Keqiang, the Chinese side had not only agreed to renew the amount, but which had also done so at a cheaper interest rate of 1.5% plus the Shanghai (Shibor) interbank supply rate instead of the previous 2.5%. more Shibor.
However, in Wednesday’s announcement, Ismail did not delve further into the deal with the consortium.
This loan agreement between China and Pakistan also comes amid reports that Pakistan is blindly following Sri Lanka’s path that will lead the country to fall into the Chinese debt trap. Pakistan’s already fragile economy suffered another setback when China recently demanded reimbursement, in November 2023, of $ 55.6 million for the Lahore Orange Line project, the Italian publication Osservatorio Globalizzazione reported.
Meanwhile, at the end of March, the foreign exchange reserves held by the State Bank of Pakistan fell by $ 2.155 billion, due to the repayment of foreign debt. Thus, Pakistan faces a bleak economic future in terms of relations with China.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated channel).
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