Chinese banks agree to lend $2.3bn, says Miftah Ismail

Finance Minister Miftah Ismail said on Thursday that Chinese banks have agreed on terms and conditions for the refinancing of $2.3 billion.

On his Twitter handle, Miftah tweeted that the terms and conditions for refinancing 15 billion RMB (Chinese currency) have been finalized with the Chinese banks. This amount is expected to arrive soon after the usual approvals from both countries. It will help support depleting foreign exchange reserves. Earlier, Miftah had hinted that financial support worth $5 billion from China and Saudi Arabia is expected to arrive. The government is also in talks with the IMF for a bailout and is taking financial measures accordingly.

The news came as a lifeline as the country is already facing an uncertain economic situation due to a delay in the revival of stalled multibillion-dollar International Monetary Fund (IMF) programme.

The development comes as a massive relief to economic policymakers that saw foreign exchange reserves held by the State Bank of Pakistan (SBP) fall to $10.09 billion, with the level staying at less than 1.5 months of import cover. The agreement with Chinese banks is expected to bolster the reserves and enable the country to make import payments while lending some support to the rupee as well which has lost over 25% since the start of the outgoing fiscal year 2021-22.