Pakistan asks China for $2b debt rollover
Finance ministry sources say China was expected to extend the loan payment period soon
ISLAMABAD:Caretaker Prime Minister Anwaarul Haq Kakar, in a letter, has requested his Chinese counterpart Li Qiang to roll over a debt of $2 billion for a year.
Finance ministry sources said China was expected to extend the loan payment period soon.
The deposit time for the $2 billion loan from China will complete on March 23.
There have been contacts between officials of the finance ministry and the Chinese authorities to roll over the debt of $2 billion.
In his letter, Kakar expressed gratitude to China for its financial assistance to Pakistan during its economic crisis.
Pakistan has secured a safe deposit of a total of $4 billion loan from China, reducing the country’s mounting pressure on external debt payments and stabilising its foreign exchange reserves.
Earlier this month, the UAE rolled over Pakistan’s maturing loan of $2 billion.
Apart from the UAE, Saudi Arabia has deposited $5 billion with the State Bank of Pakistan.
Following the loan rollover by the UAE, the interim government requested the International Monetary Fund (IMF) to dispatch a new mission this month for talks for the last loan tranche of $1.2 billion.
The IMF’s next mission is critical for not only securing the last loan tranche but also for beginning negotiations for a new long-term programme.
While speaking to a private TV news channel recently, former finance minister Ishaq Dar said in case his party – the PML-N – won the elections and formed the government, the decision about the new IMF programme would be made at the earliest.
Dar, the four-time finance minister of the country, added that in case his party decided not to enter the IMF programme, it would immediately start implementing the belt-tightening measures.
The IMF has made new adjustments in its fresh staff-level report about the available financing to Pakistan.
The Washington-based lender has increased the projection of budget support loans to $3 billion but cut the project financing to $3.7 billion for this fiscal year.
The overall external financing requirements have been reduced to little under $25 billion with minor downward adjustments in the current account deficit projections, the report showed.
The report suggested that the global lender had made a minor adjustment of $575 million in its current account deficit projection in comparison with July’s estimates.
The IMF has now projected the deficit at $5.7 billion or 1.6% of the GDP – an estimate that appeared on the higher end.