China Lends USD 700 Million To Cash-Strapped Pakistan Amid IMF Loan Delay

Pakistan has sought to secure assurances from Saudi Arabia and China for more loans, as the government seeks to revive the International Monetary Fund programme.

Pic Credit: File Photo

Islamabad: Pakistan Finance Minister Ishaq Dar on Friday said that the State Bank of Pakistan (SBP) has received USD 700 million from China Development Bank (CDB). This comes as a much-needed boost to the country's forex reserves as the country suffers from an economic crisis, Pakistan based The Express Tribune Newspaper reported. Dar took to his Twitter to make the announcement.

He wrote: "AlhamdoLilah! Funds USD 700 million received today by State Bank of Pakistan from China Development Bank". Dar had in an earlier tweet said that the loan would "shore up" Pakistan`s foreign exchange reserves.

AlhamdoLilah!

Funds $ 700 million received today by State Bank of Pakistan from China Development Bank. https://t.co/7eLwWkSFgO

— Ishaq Dar (@MIshaqDar50) February 24, 2023

Earlier this month, the country's foreign exchange reserves slipped to the alarming level of below USD 3 billion for the first time in nine years, reducing import capacity to slightly over two weeks, according to The Express Tribune.

Pakistan has sought to secure assurances from Saudi Arabia and China for more loans, as the government seeks to revive the International Monetary Fund (IMF) programme. The current situation in Pakistan is the most difficult faced by the country in the last two decades, the South Asia Press reported, adding that the country, facing an economic crisis, political chaos, and a rising number of terror attacks along the northwestern areas, has been drained of its resources.

Further, according to the report, the country`s economic deterioration has a direct impact on the public.

The floods in Pakistan came as a severe blow to the cash-strapped nation already grappling with high debt, the South Asia Press recently reported, adding that the country`s planning commission, agriculture, food, livestock, and fisheries sectors lost USD 3.7 billion in the floods with long-term losses estimated to be around USD 9.24 billion.

In December 2022, inflation in the country stood at 24.5 per cent, almost double of 12.3 per cent from the previous year, the report said, adding that the common people were the most affected by the high flour prices amid the country`s worst-ever food crisis.

The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, has said the funding agency has asked Pakistan to take steps to be able to function as a country and not get into a dangerous place where it needs debt restructuring, The News International, a Pakistan daily, reported.

"My heart goes out to the people of Pakistan. They have been devastated by the floods that affected one-third of the population of the country," Georgieva said in an interview with an international broadcaster.

"We are emphasising two things -- number one, raising tax revenues, as those who are making good money in public or private sectors, need to contribute to the economy, and, number two, a fairer distribution of precious resources by taking subsidies away from people who don`t need them. It shouldn't be that the wealthy benefit from subsidies. It should be the poor [who] benefit from them," she said, as quoted by The News International newspaper. "And there, we are very clear. We want the poor people of Pakistan to be protected," she added