ISLAMABAD: Pakistan’s central bank announced in a brief statement on Friday the country had received $1 billion from China amid the government’s efforts to shore up the official foreign exchange reserves by seeking external financing from friendly nations and international lenders.
For several months, Pakistan had been struggling to stay economically afloat due to critically low forex reserves, rising inflation, and an acute balance of payment crisis. The country had been desperately trying to revive a stalled $6.5 billion bailout loan from the International Monetary Fund (IMF), but the program has remained in limbo despite various rounds of talks with the lender.
To prevent the possibility of default, friendly countries have pledged external financing to strengthen Pakistan’s dwindling forex reserves. In March, China rolled over a $2 billion loan, while Saudi Arabia and the United Arab Emirates pledged $2 billion and $1 billion, respectively, to assist the cash-strapped South Asian country.
“This is to inform you that $1 billion has been received from China,” a brief media statement circulated by the State Bank of Pakistan (SBP) confirmed on Friday.
The central bank reported on Thursday that the total liquid foreign reserves, including the money held by the SBP and various commercial banks, stood at $9.4 million as of June 9. The breakdown provided by the central bank revealed the SBP held about $4 billion, while commercial banks possessed $5.4 billion.
Earlier in the day, Pakistan’s finance minister confirmed that China would roll over $1 billion at Pakistan’s request, and the country was in talks with the Bank of China for additional loan amounting to $300 million.
Furthermore, he stated last week that Islamabad expected the transfer of $2 billion from Riyadh and $1 billion from Abu Dhabi before June 30.
