ISLAMABAD: Finance Minister Ishaq Dar said on Saturday that Pakistan cleared the dues of Chinese banks ahead of time to secure refinancing, though the arrangement came at no extra cost to the country. Besides, another $300 million would be rolled over in three to four days, he said.

Mr Dar’s statement came a day after the government announced that about $2.3 billion in Chinese loans would be rolled over before the ongoing fiscal year ends on June 30.

That included the repayment and refinancing of $1.3bn loans and $1bn State Administration of Foreign Exchange (SAFE) deposit.

Later on Friday night, the State Bank of Pakistan confirmed to have received $1bn. Mr Dar said this amount had been paid back to the China Development Bank on Monday and it was rolled over within a week after the bank agreed to refinance the loan facility to Pakistan.

Besides, another $300m loan had been paid back to the Bank of China on Friday, Mr Dar said, hoping that it would be refinanced in three to five days.

As for the remaining $1bn, to be paid to China as a state-to-state payment, he said it would be done in two equal instalments of $500m and this would be renewed as well.

“I thank Almighty that things are on track and want to clarify this to those who were making guesswork at media,” he added.

Mr Dar earlier decided to hold a news conference on Saturday, though he preferred to release only a recorded statement later.

He recalled that some rating agencies had predicted the chances of Pakistan’s default due to huge repayments in May and June. “But I had given a reaction at that time too that the arrangements were in place,” he said.

The credit rating agencies Fitch and Moody’s Investors Service earlier expressed concerns over Pakistan’s low foreign exchange reserves, warning that it would make it difficult for the country to repay foreign loans in June.

Shell Pakistan

Mr Dar said he also wanted to “clarify” the news about Shell Pakistan Ltd saying earlier this week that its foreign sponsor was planning to sell its entire 77 per cent stake in the oil marketing company as part of simplifying its global portfolio.

He said Shell was not closing its business in Pakistan and no one would lose their job. “Shell was selling its stakes to another investor internationally,” he said, adding that the government of Pakistan was aware of negotiations between Shell and the investor.

He said the shifting of stakes would not have any serious impact on its business operations in Pakistan, as there would not be any shifting of capital abroad, nor would the oil terminals and fuel stations of Shell close down. He said Shell was not only operating in Pakistan, but it was also running its business in many other countries and intended to revise its business plan.

The government, he said, was also aware of all the programmes of the company and it was legally bound to take the government into confidence. Shell was selling its shares to another international investor and its business would continue and no one would be deprived of livelihood, he said.

The minister said it was also likely that the new investor would retain the name of Shell to run its Pakistan operations.

Published in Dawn, June 18th, 2023