January 31, 2022
1 min read

Pakistan seeks $3 bn loan from China to stabilise forex reserves

 The Pak prime minister will depart for Beijing on February 3 and attend the inaugural session of the Winter Olympics there….reports Asian Lite News

Pakistan has set its sight on a loan to the tune of $3 billion from China to stabilise its dwindling foreign exchange reserves and also seeks an investment bonanza in half a dozen sectors during the visit of Pak Prime Minister Imran Khan to Beijing next week, Express Tribune reported.

In addition to political engagement, the Pak premier would also seek Chinese support in areas of finance, trade and investment.

The Pak prime minister will depart for Beijing on February 3 and attend the inaugural session of the Winter Olympics there.

A senior finance ministry official said the government was considering requesting China to approve another loan to the tune of $3 billion in China’s State Administration of Foreign Exchange, known as SAFE deposits, the report said.

China has already placed around $11 billion with Pakistan in the shape of commercial loans and foreign exchange reserves support initiatives, including $4 billion in SAFE deposits.

The Chinese money is part of the country’s current official foreign exchange reserves recorded at $16.1 billion.

In the last fiscal year, the country had paid over Rs 26 billion in interest cost to China only for using a $4.5 billion Chinese trade finance facility to repay the maturing debt.

Last month, Pakistan also received a Saudi loan of $3 billion, which the country has consumed. The foreign exchange reserves that before the Saudi injection stood at $15.9 billion have already fallen to $16 billion by January 21.

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