Pakistan to receive $2.1 billion from China by Monday

by on 23 March 2019

Pakistan will receive $2.1 billion loan from China by Monday, March 25, Radio Pakistan reported on Monday.

Dr Khaqan Najeeb Khan, the finance ministry spokesperson, said that “all procedural formalities” for the transfer of loan have been completed and the funds will be deposited in the SBP account by 25th March.

It will further strengthen country’s balance of payment situation, the spokesperson said.

In November, the Financial Times reported that China had pledged to lend at least $2bn to Pakistan to shore up its foreign exchange reserves and prevent further devaluation of the rupee against the dollar.

“The financial support package for Pakistan is currently being worked out … it will be more than what extended by Saudi Arabia in terms of financial grant,” Deputy Head of Mission at Chinese Embassy Zhao Lijian told reporters in November last year.

The government was able to secure back to back aid packages from Saudi Arabia and the UAE during Prime Minister Imran Khan’s visits to these countries last year.

The Saudi government has dispatched the $3 billion it had pledged in support of our foreign exchange reserves. The UAE, on the other hand, has sent $2 billion and will send another $1 billion soon.

As Pakistan started receiving these loans, the dollar became stable. However, the current level of reserves, $8.8 billion, is still below the sustainable level. That is it is not enough to cover three months of import payments.