ISLAMABAD     -     In a significance move, China Saturday approved rollover of $1.3 billion loan for Pakistan after completing the necessary formalities, which would help build country’s much low foreign exchange reserves.

“Formalities completed & Chinese Bank, ICBC approved rollover of US$1.3 billion facility which has been repaid by Pakistan to ICBC in recent months. Facility will be disbursed in 3 installments; first one of US$500 million has been received by SBP. It will increase forex reserves,” Finance Minister Ishaq Dar said on Twitter. Pakistan had already received much needed $700 million from China in last week. Overall financing from the friendly country would reach to $2 billion.

The inflow of $700 million had helped in increasing the foreign exchange reserves. The total liquid foreign reserves held by the country stood at $ 9.267 billion as of 24th February, 2023. Foreign reserves held by the State Bank of Pakistan are $ 3.814 billion and foreign reserves held by commercial banks are $ 5.453 billion. “During the week ended on 24th February, 2023, SBP received $ 700 million as GoP commercial loan disbursement from China. After accounting for external debt repayments, SBP reserves increased by $ 556 million to $ 3,814.1 million,” the SBP stated.

Meanwhile, the government is expecting to finalise staff level agreement with International Monetary Fund (IMF) in next week, which would pave way for getting loan tranche of above one billion dollars. It would also help in getting loan from friendly countries including Saudi Arabia and United Arab Emirates (UAE).

According to the latest data of ministry of Economic Affairs, Pakistan borrowed $6.134 billion from multiple financing sources during the first seven months (July-January) of 2022-23. The government has budgeted foreign assistance of $22.817 billion for the current fiscal year.

The country received $3.463 billion from multilaterals and $838.67 million from bilateral and $1.166 billion from IMF during July-January 2022- 23. The country borrowed $200 million from foreign commercial banks during the first seven months of the current fiscal year 2022-23. The government procured $294.54 million external loans in January 2023. The country received $466.35 million under the head of “Naya Pakistan Certificate” during the first seven months of the current fiscal year including $71.55 million in January 2023.

The Asian Development Bank (ADB) disbursed $1.916 billion during the period under review compared to the budgeted $3.202 billion for the entire fiscal year. China disbursed $54.93 million. Saudi Arabia disbursed $690.11 million against the budgeted $800 million. The USA disbursed $18.71 million during the period under review against the budgeted $32.49 million for the current fiscal year. Korea disbursed $19.79 million and France $21.82 million during the first seven months of the current fiscal year. The IDA $684.16 million against the budgeted $1.4 billion, IBRD $96.55 million against the budgeted $1.246 billion and Islamic Development Bank disbursed $16.81 million against the budgeted $3.38 million for the current financial year. The IsDB (short-term) disbursed $161 million in the current fiscal year. The AIIB disbursed $538.46 million in the current fiscal year so far.