[ad_1]
To cope up with country’s dwindling cash reserves, loan of USD 2.3 billion from a Chinese consortium of banks to Pakistan is expected within a “couple of days”.
Notably, a Chinese consortium of banks and Pakistan had signed a USD 2.3 billion loan facility agreement earlier. In a latest update on the agreement, on Wednesday, Pakistan’s finance minister Miftah Ismail said that cash inflow under the loan agreement is expected within days, reported Pakistan’s local media outlet Dawn.
Taking to Twitter, Ismail wrote, “The Chinese consortium of banks has today signed the RMB 15 billion (~$2.3 billion) loan facility agreement after it was signed by the Pakistani side yesterday. Inflow is expected within a couple of days. We thank the Chinese government for facilitating this transaction.”
Foreign Minister of Pakistan Bilawal Bhutto Zardari wrote on social media, “Grateful to President Xi Jinping, Foreign Minister Wang Yi and the people of China. Chinese consortium of banks has today signed the RMB 15 billion loan facility agreement, the people of Pakistan are grateful for the continued support of our all-weather friends.”
Pakistan is in a deep financial crisis and this development comes after reports emerged of Pakistan reaching an understanding with the International Monetary Fund (IMF), as per the media outlet.
Ismail said that after a visit by Foreign Minister Bilawal Bhutto-Zardari and follow-up discussions by Prime Minister Shehbaz Sharif with Prime Minister Li Keqiang, the Chinese side had not only agreed to roll over the amount but also done so at a cheaper interest rate of 1.5pc plus Shanghai Interbank Offered Rate (Shibor) instead of earlier 2.5pc plus Shibor.
However, In Wednesday’s announcement, Ismail did not elaborate further on the agreement with the consortium.
This loan agreement between China and Pakistan also comes amid reports that Pakistan is blindly following Sri Lanka’s path which will lead the country to fall into the Chinese debt trap. Pakistan’s already fragile economy suffered another setback when recently China demanded repayment, by November 2023, of USD 55.6 million for the Lahore Orange Line Project, reported Italian publication Osservatorio Globalizzazione.
Meanwhile, at the end of March, the foreign exchange reserves held by the State Bank of Pakistan fell by a massive USD 2.915 billion, due to the repayment of external debt. Thus, Pakistan faces a bleak economic future as far as relations with China are concerned.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
[ad_2]
Source link
