Finance Minister Miftah Ismail has announced that Chinese banks have approved a $2.3 billion loan for Pakistan and that the money would be transferred to the State Bank of Pakistan within ‘a couple of days.’
The finance minister thanked the Beijing government for facilitating the transaction.
In a tweet, Miftah Ismail said that a consortium of Chinese banks had signed the loan facility on Wednesday after Pakistan signed the document on Tuesday.
The “inflow is expected within a couple of days. We thank the Chinese government for facilitating this transaction,” the finance minister said.
The announcement comes hours after a major breakthrough was reported in talks between the IMF and Pakistan government over the budgetary proposals.
The report created a positive sentiment in stock and money markets but it could not lost longer. The rupee closed lower in the intraday trading after making gains in the first session. The stock market too closed in the red.
China had deposited 15 billion Renminbi (RMB)(around US$102.2 billion) with the State Bank of Pakistan in March 2019 to bolster the country’s forex reserves. The Beijing government was expected to provide a rollover when the loan matured this year, but a rollover could not materialize and the Chinese banks withdrew the money from Pakistan.
After holding negotiations with Pakistani officials at several levels, the Chinese agreed to refinance the loan earlier this month, Miftah Ismail announced on June 2.
However, the finance minister later admitted that the Chinese and other friends of Pakistan were not ready to transfer funds until Islamabad reached a deal with the IMF.