Islamabad:
Pakistan repaid China’s $ 1 billion commercial loan, leaving foreign exchange reserves temporarily reduced 54 million dollars to $ 10.6 billion in six months.
According to government officials, Pakistan has paid the Industrial and Commercial Bank of China (ICBC) loan in 2 equal installments in the first and third week of this month.
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The ICBC paid the loan to Pakistan about 7.5 percent of the floating rate 2 years ago. Sources say another installment of $ 30 million of this bank’s loan will have to be paid in the midst of April.
Governor State Bank has said that the government of Pakistan has bought $ 9 billion from the market in 2024.
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If the government did not do so, Pakistan’s foreign exchange reserves would have to barely be $ 2 billion despite receiving money from the IMF program.
Finance sources say that ICBC is also ready to lend to Pakistan if needed, for which talks have begun, but the issue of interest rates is not yet agreed. Pakistan is relying more on China in terms of loans.
China is steadily leading to a $ 6.5 billion commercial loan and a $ 4.3 billion trade financing fishest. This year, $ 2.7 billion Chinese debt payments are also ending from April to June.
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Similarly, three Chinese commercial banks’ syndicate financing loans of $ 2.1 billion have been matched till June. Apart from this, the Bank of China will have to pay $ 30 million this month for which Pakistan has arranged refinance so that foreign exchange reserves can be supported.
Unlike in the past, this time Pakistan is not expected to resort to the IMF to repay its loans. Although there has been a staff level agreement with Pakistan, the IMF board meeting is not taking place before May or June.
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If the board meeting is held, Pakistan will get one billion dollars from the IMF. Pakistan wants it to get the money before June.
Many cases between Pakistan and the IMF have yet to be resolved, including taxes, beverages and tax issues on the purchase of property. The IMF is not yet willing to reduce the tax on property to increase the productivity of the economy.
Pakistan last month also requested China to resolve a $ 3.4 billion loan from China to meet its foreign funding gap on the demand of the IMF. China’s Exam Bank will review it. The Treasury has not yet said anything about the request.
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Pakistan needs $ 5 billion in external financing gaps to meet the IMF’s three -year program. The IMF has acknowledged during the recent talks that the situation with regard to Pakistan’s external payments has been strengthened.
However, the remaining weaknesses can be overcome by ease with strict financial and zero policies, along with strict financial and zero policies. This year, the value of the rupee has been stabilized against the dollar, however, the rupee has been under pressure for the last few days and the dollar has been reduced to Rs 280.2.
