State Bank of Pakistan receives $2.2 billion under Chinese loan arrangement

Published March 25, 2019
Last week, the Ministry of Finance has announced that the SBP would receive a 15 billion yuan loan, equivalent to $2.1bn, from China by Monday (today). — Reuters/File
Last week, the Ministry of Finance has announced that the SBP would receive a 15 billion yuan loan, equivalent to $2.1bn, from China by Monday (today). — Reuters/File

The State Bank of Pakistan (SBP) on Monday announced that it had received 15 billion Renminbi (RMB) — also known as yuan — equivalent to $2.2 billion, as proceeds for a loan extended to Pakistan by the Chinese government.

Finance ministry adviser and spokesperson Dr Khaqan Hassan Najeeb confirmed the development to DawnNewsTV.

Last week, the Ministry of Finance had announced that the SBP would receive a 15 billion yuan loan, equivalent to $2.1bn, from China by Monday (today).

Dr Najeeb had said that "all procedural formalities" for the transfer of the loan being provided to Pakistan by the Chinese government have been completed, and "the funds will be deposited in the SBP account by Monday, March 25".

The loan facility, the spokesperson had said, "will further strengthen foreign exchange reserves and ensure balance of payment stability."

Following a meeting in Beijing between Chinese Premier Li Keqiang and Prime Minister Imran Khan in November 2018, China had said that it was willing to offer assistance to Pakistan to help it weather its current fiscal woes, but that the terms of such aid were still being discussed.

Shortly after, Chinese Consul General Long Dingbin had said during an interview that in order to "boost Pakistan's economy", Beijing is investing in multiple sectors and launching business ventures instead of providing loans.

In February this year, in response to a Financial Times report which said that China had pledged to lend at least $2bn to Pakistan to shore up its foreign exchange reserves and prevent further devaluation of the rupee against the dollar, Chinese foreign ministry spokesman Lu Kang had tentatively acknowledged that it was extending financial assistance to help Pakistan.

"The Chinese side has offered and will continue to offer its best through assistance, trade, investment and all-around practical cooperation to support and boost Pakistan’s economic and social development," Kang had said.

At the time, it was the first official confirmation by a Chinese official that Beijing had planned to extend a financial package to Islamabad. The terms of the package, however, had remained elusive until last week.

Additionally, Dr Najeeb today said that after receiving the Chinese loan, the foreign exchange reserves held by the SBP had hit the double-digit mark of $10.67bn.

In a tweet, he added that the net foreign exchange reserves held by commercial banks stood at $6.91bn.

He said the "implementation of a successful strategy" had resulted in the total foreign exchange reserves of the country rising to $17.58bn.

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Crisis conference
Updated 04 Feb, 2023

Crisis conference

PTI's refusal to engage with the govt in such testing times will only be seen as sign of ideological bankruptcy.
Revenge politics
04 Feb, 2023

Revenge politics

A SENSE of déjà-vu prevails as cases pile up against PTI politicians, many of whom, along with their allies and...
Inappropriate remarks
04 Feb, 2023

Inappropriate remarks

OFFICIALS of the state, especially when representing the country at international forums, need to choose their words...
Delay in the offing?
Updated 03 Feb, 2023

Delay in the offing?

Govt must realise that political stability in the country cannot be achieved by extra-constitutional actions.
Divisions in PML-N
03 Feb, 2023

Divisions in PML-N

DISCORD and drama in PML-N ranks escalated this week when Shahid Khaqan Abbasi revealed he no longer holds a party...
Wikipedia ‘downgrade’
03 Feb, 2023

Wikipedia ‘downgrade’

ATTEMPTS to police the internet by states, often by giving opaque justifications for the action, are never a good...