Cash-strapped Pakistan gets $2.3 billion from China

Pakistani Finance Minister Miftah Ismail said on Friday that a loan of USD 2.3 billion from a Chinese consortium of banks had been credited to the central bank’s account.

Taking to Twitter, Ismail wrote, “I am pleased to announce that a Chinese consortium loan of RMB 15bn (roughly USD 2.3 bn) has been credited into State Bank of Pakistan (SBP) account today, increasing our foreign exchange reserves,” a media report said.

He said Chinese consortium of banks signed the RMB 15 billion ($2.3 billion) loan facility agreement today after it was signed by the Pakistani side yesterday. The inflow is expected within a couple of days.

After a visit by Foreign Minister Bilawal Bhutto-Zardari and follow-up discussions by Prime Minister Shehbaz Sharif with Prime Minister Li Keqiang, the Chinese side had not only agreed to roll over the amount but also done so at a cheaper interest rate of 1.5pc plus Shanghai Interbank Offered Rate (Shibor) instead of earlier 2.5pc plus Shibor, the Pak Finance Minister said, according to the report in Daily Asian Age.

However, in Wednesday’s announcement, Ismail did not elaborate further on the agreement with the consortium.

Only recently China reportedly demanded repayment, by November 2023, of USD 55.6 million for the Lahore Orange Line Project.