ISLAMABAD: China has given a loan of $ 2.3 billion to Pakistan, which is facing a financial crunch. Pakistani Finance Minister Mifta Ismail said on Friday that a $2.3 billion loan from a consortium of Chinese banks has been deposited in the account of the State Bank of Pakistan. This loan from China will help in boosting Pakistan’s depleting foreign exchange reserves.
Pakistan’s Finance Minister Mifta Ismail wrote on Twitter, “I am pleased to announce that a 15 billion RMB (approximately $2.3 billion) loan from the Chinese consortium has been credited to the State Bank of Pakistan (SBP) account today.” Due to this our foreign exchange reserves have increased.
Two days ago, China-Pakistan had made an agreement
Pakistan had signed a $2.3 billion commercial loan agreement with China two days ago. He also thanked the Chinese government for facilitating the transaction. Foreign Minister Bilawal Bhutto-Zardari also thanked the Chinese leadership. He had said that the people of Pakistan are grateful for the continued support of our evergreen friends.
Since February, Pakistan had been pleading for loans to maintain its rapidly depleting foreign exchange reserves. However, the IMF had put many conditions for giving loans to Pakistan. After which Pakistan had to turn to its evergreen friend China.
Price of the Pakistani rupee falling continuously
Due to the increasing trade deficit and rapid withdrawal of money, the value of the Pakistani rupee against the dollar is falling continuously. The deadline to repay the loan has put tremendous pressure on the State Bank of Pakistan’s liquid foreign exchange reserves.
Because of this, like Pakistan, the foreign exchange reserves fell by more than $ 5.1 billion to $ 11.3 billion from February to the last week of April. According to Pakistan’s central bank, its foreign exchange reserves stood at $8.99 billion on June 10, which increased to $14.21 billion on June 17.
