Finance Minister Ishaq Dar announced on Friday that cash-strapped Pakistan had another received $500 million from the Industrial and Commercial Bank of China Ltd (ICBC).

Taking to Twitter, Dar said the State Bank of Pakistan (SBP) had received the money in its account, saying that it would help to shore up foreign exchange reserves.

On March 4, ICBC had approved a rollover of a $1.3 billion loan for Pakistan. At the time, Dar said the facility would be disbursed in three instalments, with the first instalment of $500m received by the central bank.

Pakistan is in a race against time to implement measures to reach an agreement with the International Monetary Fund (IMF). The agreement with the IMF on the completion of the ninth review of a $7bn loan programme — which has been delayed since late last year over a policy framework — would not only lead to a disbursement of $1.2bn but also unlock inflows from friendly countries.

The prerequisites by the lender are aimed at ensuring Pakistan shrinks its fiscal deficit ahead of its annual budget around June.

Pakistan has already taken most of the other prior actions, which included hikes in fuel and energy tariffs, the withdrawal of subsidies in export and power sectors, and generating more revenues through new taxation in a supplementary budget.

As a last step, the international lender has required Pakistan to guarantee that its balance of payments deficit is fully financed for the remaining period of an IMF programme.

Meanwhile, foreign exchange holdings of both the central bank and commercial banks improved during the week which ended on March 10 reflecting the higher inflows of remittances and export proceeds.

The SBP said on Thursday that its foreign exchange reserves witnessed a meagre rise of $18m to $4.319bn during the week, but did not mention the source of this increase.

At the same time, the forex reserves of commercial banks registered an increase of $74m to $5.52bn during the week, indicating improved inflows of export proceeds and remittances thanks to a much higher exchange rate following the ending of an artificial cap on the dollar rate. The rupee managed to recover 43 paise against the US dollar to close at Rs282.42 on Thursday.