ISLAMABAD: The Industrial and Commercial Bank of China is set to give Pakistan 300 million dollars today (on Friday) in a move that will boost Pakistan’s foreign exchange reserves, Finance Minister Ishaq Dar said on Friday.
Talking to Twitter, the minister said that ICBC had approved a loan of 1.3 billion dollars for Pakistan, which had earlier been repaid. It has already returned part of the amount in 2 previous disbursements.
He said that the State Bank would receive back 3rd and last disbursement today, amounting to 300 million dollars. It will shore up the country’s forex reserves.
The third important disbursement from the Chinese bank will be released after Pakistan completes the required documentation.
Industrial and Commercial Bank of China rollover loan
Last month, the ICBC approved a rollover of a 1.3 billion dollars loan for Pakistan. After the announcement, the Chinese lender deposited 500 million dollars— the first disbursement — on 4 March and then the 2nd tranche of an equivalent amount was released on 17 March.
The cash-strapped Pakistan of 220 million people is going through one of its toughest economic crises ever as multiple delays in the loan program created a shortage of dollars and necessary restrictions and reduced foreign exchange reserves to less than 1 month of imports.
Pakistan’s foreign exchange reserves stand at 4 billion dollars, while it needs to pay 2.2 billion dollars in the quarter ending June. It is expected to roll over a debt of 2.3 billion dollars, according to SBP Governor Jameel Ahmad.
More external financing will be coming to the country only after Islamabad inks a deal with the International Monetary Fund, which the finance minister said should be done by next week.
The big lender has been discussing the deal with Pakistan since end-January to clear its 9th review. If approved by its board, it will issue over 1 billion dollars tranche of the 6.5 billion dollars bailout agreed upon in 2019.
