China Comes Through with $2.3 Billion Loan to Pakistan

State Bank of Pakistan (SBP) reception desk at the head office in Karachi Photo: Reuters

Some $2.3 billion in funding promised by a China-based group has been delivered to Pakistan as the country seeks to stabilise its fast-depleting foreign reserves, finance minister Miftah Ismail said.

Pakistan is still working to secure further assistance from the International Monetary Fund to ease a dire financial crisis.

Pakistan central bank foreign exchange reserves fell to as little as $8.2 billion, and the Pakistani rupee has hit a record low against the US dollar.

ALSO IN AF: Pakistan Signs $2.3bn Loan Agreement With China

“I’m pleased to announce that Chinese consortium loan of roughly $2.3 billion has been credited into State Bank of Pakistan account today, increasing our foreign exchange reserves,” minister Ismail said in a tweet.

Pakistan entered a 39-month IMF program in 2019, but less than half the $6 billion committed has been disbursed, as Islamabad struggles to meet IMF fiscal requirements.

In a move designed to do that, the government announced it would impose a one-year, 10% tax on large-scale industry, a move that will raise over 400 billion Pakistani rupees ($1.93 billion) in additional revenue.

Reuters, with editing by Neal McGrath

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Neal McGrath

Neal McGrath is a New York-based financial journalist. Neal started his career covering the Asia-Pacific region for the Economist Intelligence Unit, then joined Asian Business magazine. He's subsequently held a variety of editorial positions covering business, economics, finance and sustainability. Neal has lived and worked in Hong Kong, Singapore, Germany and the US.