Islamabad: In a major relief to the cash-strapped country, Pakistan received USD 1 billion from China, ARY News reported citing the State Bank of Pakistan.
“This is to inform you that USD 1 billion has been received from China,” said the central bank in a brief message to journalists on Friday night.
While the country is waiting for International Monetary Fund to release a loan from the bailout programme, China’s payment came as a ray of hope for the nation.
Commenting on the diminishing foreign reserves of the country, Finance Minister Ishaq Dar said USD 1.30 billion recently paid to settle a Chinese loan will be refinanced by China today or Monday.
“SBP will receive USD 1.30 billion from China today or Monday,” Ishaq Dar said and added that talks for a USD 2 billion dollar swap were also underway with Beijing, according to ARY News.
Pakistan’s economy is in turmoil amid financial woes and the delay in an agreement with the IMF that would release much-needed funding crucial to avoid the risk of default.
Pakistan is seeing no signs of securing external financing any time soon amid political instability.
Earlier, the IMF expressed dissatisfaction with Pakistan’s recently presented budget.
Pakistan has barely enough currency reserves to cover one month’s imports. It had hoped to have USD 1.1 billion of the funds released in November – but the IMF has insisted on a number of conditions before it makes any more disbursements, according to Dawn.
Dar did hold several sessions but has failed to convince the top IMF officials for the completion of the 9th review essential for securing a staff-level agreement for the release of the USD 1.1 billion tranche.
Only two weeks are left for Pakistan to reach a deal with IMF or face failure that would have serious consequences for the economy. The bailout package will expire on June 30, reported Dawn.
Pakistan’s IMF programme expires this month, with over USD 2.5 billion in funding yet to be released as the country seeks to reach an agreement with the lender while dealing with record inflation, fiscal imbalances, and low reserves.
A general election is scheduled for November, which the government hopes will resolve the uncertainty caused by the protest movement led by the chairman of the Pakistan Tehreek-e-Insaf (PTI) since his ouster in a no-confidence vote last year.
A staff-level IMF agreement to release USD 1.1 billion of a USD 6.5 billion package has been delayed since November.