KARACHI: In a major boost to foreign exchange reserves, the State Bank of Pakistan (SBP) on Friday said it has received $1 billion from China, ARY News reported.
“This is to inform you that $1 billion has been received from China,” said the central bank in a brief message to journalists on Friday night.
The refinancing came hours after Finance Minister Ishaq Dar informed the National Assembly’s (NA) Standing Committee on Finance and Revenue that China would be refinancing the $1 billion loan it had given to Pakistan earlier.
Commenting on the diminishing foreign reserves of the country, Dar said $1.30 billion recently paid to settle a Chinese loan will be refinanced by China today or Monday.
Read more: SBP’s foreign exchange reserves ‘fall below $3bn’ after Chinese loan payment
“SBP will receive $1.30 billion from China today or Monday,” Ishaq Dar said and added that talks for a $2 billion dollar swap were also underway with Beijing.
Pakistan’s economy is in turmoil amid financial woes and the delay in an agreement with the International Monetary Fund (IMF) that would release much-needed funding crucial to avoid the risk of default.
Pakistan is seeing no signs of securing external financing any time soon amid political instability.
The government has been in talks with the international lender since end-January to resume the $1.1 billion loan tranche that has been on hold since November, part of a $6.5 billion Extended Fund Facility (EFF) agreed upon in 2019.
Read More: IMF says Pakistan ‘missed’ opportunity to broaden tax base
Meanwhile, an analyst of Moody’s Investor Service in an interview with Bloomberg said Pakistan is heading towards ‘default’ and added Pakistan cannot complete the current IMF loan program until June 30.
‘Pakistan-IMF talks neither failed nor concluded’
A day earlier, Finance Minister Ishaq Dar had said that Pakistan and International Monetary Fund (IMF) talks have not failed nor the negotiation phase has concluded.
Ishaq Dar, while talking to journalists, predicted that the 9th review of the IMF programme will be completed this month. “Our talks with the IMF are underway and it has not concluded yet. We have already made the payment for which Fitch expressed concerns.”
“The Pakistan-IMF talks have not failed and there is no issue in payments till June 30. We are fully prepared to make timely payments till June 30.”
The finance minister claimed that some elements want to see Pakistan like Sri Lanka before holding talks with the IMF. “Geopolitics is underway to default Pakistan. The amendments in the State Bank Act are intolerable. We have also amended the State Bank Act, however, it is incomplete yet.”
Dar said that State Bank is a bank of Pakistan and it does not belong to any global institution. “It is our priority to make timely payments including bonds.
Read more: US supports IMF loan program for Pakistan, says Yellen
Rejecting the rumours, Ishaq Dar that the federal government will not make a decision to freeze lockers, gold and Roshan Digital Accounts. He added that the enemies of Pakistan are spreading fear among people by telling lies.
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