Chinese bank rolls over $600m loan to Pakistan: PM Shehbaz

Prime Minister Shehbaz Sharif announced on Tuesday that a Chinese bank had rolled over a $600 million loan to Pakistan, bolstering the country’s cash reserves.

The premier was speaking at the inaugural ceremony of the Prime Minister’s Youth Sports Initiative in Islamabad, where he promised to spend more cash for youth development if re-elected.

“Yesterday, the Exim Bank of China rolled over $600 million to Pakistan, which increased our foreign currency reserves,” Prime Minister Shehbaz Sharif said, adding that support from friendly countries is improving economic indicators.

He did not, however, explain on when this payment was due.

After the International Monetary Fund (IMF) authorised a $3 billion bailout package and transferred the first tranche of $1.2 billion under a nine-month stand-by agreement, the country is displaying signs of economic stabilisation.

After teetering on the verge of a sovereign debt default, Pakistan received $1 billion from the UAE and $2 billion from Saudi Arabia earlier this month, as both were reassured by the agreement reached between Islamabad and the IMF at the end of June.

He did not, however, explain when this payment was due.

After the International Monetary Fund (IMF) authorised a $3 billion bailout package and transferred the first tranche of $1.2 billion under a nine-month stand-by agreement, the country is displaying signs of economic stabilization.

After teetering on the verge of a sovereign debt default, Pakistan received $1 billion from the UAE and $2 billion from Saudi Arabia earlier this month, as both were reassured by the agreement reached between Islamabad and the IMF at the end of June.

He did not, however, explain on when this payment was due.

After the International Monetary Fund (IMF) authorised a $3 billion bailout package and transferred the first tranche of $1.2 billion under a nine-month stand-by agreement, the country is displaying signs of economic stabilization.

After teetering on the verge of a sovereign debt default, Pakistan received $1 billion from the UAE and $2 billion from Saudi Arabia earlier this month, as both were reassured by the agreement reached between Islamabad and the IMF at the end of June.

IMF projections

According to an IMF statement, the rescue plan would focus on an appropriately tight monetary policy aimed at reducing pricing pressures in the 220 million-person South Asian country.

Inflation is expected to average 25.9% in fiscal year 2024, though it is expected to moderate to roughly 16% by the conclusion of that year.

With the key policy rate at 22%, the government forecasts 21% inflation in fiscal 2024.

“A continued tight, proactive, and data-driven monetary policy is warranted going forward,” warned the IMF.

With only enough central bank reserves to cover barely a month of restricted imports, Pakistan’s struggling economy has faced a severe balance of payments crisis. According to the IMF, it will have 1.4 months of import cover in fiscal 2024.

The IMF agreement, which saved Pakistan from default, came after eight months of difficult negotiations over fiscal restraint.

“A market-determined exchange rate is also critical for absorbing external shocks, reducing external imbalances, and restoring growth, competitiveness, and buffers,” according to the IMF.

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