Finance Minister Miftah Ismail announced on Thursday that the terms and circumstances for Chinese banks refinancing a $2.3 billion deposit (about RMB 15 billion) had been reached.
“The terms and circumstances for Chinese banks refinancing an RMB 15 billion deposit (about US$ 2.3 billion) have been agreed upon. Inflow is expected soon after normal permissions from both sides,” the finance minister tweeted.
The inflow, according to the minister, will assist in shoring up the country’s foreign exchange reserves.
The news comes as a huge relief, given the country is still in a precarious economic situation as a result of the International Monetary Fund’s bailout program being delayed.
Following the most recent round of discussions, the international lender stated that there had been departures from the policies agreed upon in the previous review, owing in part to the government’s announcement of gasoline and power subsidies.
In order to unlock the $1 billion tranches, the government has recently increased the price of petroleum products and electricity, two of the primary IMF requests.
On May 27, 2022, the State Bank of Pakistan’s (SBP) foreign exchange reserves fell to a 128-week low of $9.7 billion.
The Chinese banks’ deposits will provide a much-needed boost to the country’s reserves. It will also help the rupee, which has been under pressure against the US dollar in recent months.