Pakistan will get another $1.3 billion from all-weather ally China to shore up its fast-depleting forex reserves, Finance Minister Ishaq Dar said on Monday
Pakistan will get another $1.3 billion from all-weather ally China to shore up its fast-depleting forex reserves, Finance Minister Ishaq Dar said on Monday, days after the cash-strapped country received $700 million from Beijing. Addressing a press conference here, Dar said that the Industrial and Commercial Bank of China Ltd (ICBC) would provide the funding in the coming days.
"All our formalities with the ICBC are complete as of last night. We returned them $1.3bn in the last few months … they are giving it back and have renewed this facility,” he said. The minister said that $500 million would be transferred to Pakistan possibly in the next few days - by Monday or Tuesday - and another USD 500 million within 10 days. Last week, Pakistan received a much-needed cash injection of $700 million from China to help its ailing economy before the finalisation of talks with the IMF for financial assistance. It prompted Prime Minister Shehbaz Sharif to express gratitude to the “special friend” of Pakistan.
Dar also assured the citizens that the country would not default. "We have never defaulted and we won’t now. Yes, we were in a precarious situation and are going through it currently,” he said. Talking about the fast-depleting reserves, he said there were $3.82 billion with the State Bank of Pakistan and combined with amounts held by commercial banks, the net national reserves were around $9.26 billion.
“There will be a further increase in this. China has given proof of great friendship,” he said. Dar also said Pakistan suffered over $30 billion in financial losses due to the last year's devastating floods.
“Our requirement (to offset these losses) for the next three to four years is for $16 billion or Rs 4,000 billion,” he said. The finance minister said the government had a complete roadmap supported by policies for taking the country out of the difficulties but refused to provide its details. “I am confident that by June 30 we will take the State Bank’s reserves to $10 billion and national reserves near to $16 billion,” he said.
He blamed the previous government led by ousted premier Imran Khan for ruining the country's economy. He said Pakistan has fulfilled all conditions of the International Monetary Fund to get the next tranche of $1.1 billion. Pakistan and the IMF have been holding virtual talks after the two sides held 10 days of intensive negotiations with an IMF delegation in Islamabad from January 31 to February 9, which failed to reach an agreement.