State Bank receives $500m loan from China

KARACHI, March 04 (SABAH): China, the second largest global economy, has released a loan tranche of $500 million to help Pakistan stabilise its foreign exchange reserves and avert an imminent default on foreign debt.

The friendly country extended the tranche after Islamabad fulfilled almost all the tough conditions pre-requisite for revival of the International Monetary Fund (IMF)  loan programme and the country is expected to achieve a staff-level agreement with the global lending institution next week.

Ishaq Dar on the other day had said on his Twitter handle that the Chinese Industrial and Commercial Bank of China Ltd (ICBC) has completed all formalities and approved rollover of $1.3 billion facility that Pakistan repaid in recent months.

“[The] facility will be disbursed in three installments. First one of $500 million was received by the SBP. It will increase forex reserves,” he said. To recall, almost all the multilateral and bilateral creditors, including friendly countries, were still waiting for revival of the IMF loan programme to implement their financial commitments amounting to over $9 billion to help the flood-hit devastated nation.

However, Beijing ended its wait for the IMF nod and came forward to save Islamabad from a likely default. Dar reiterated at a news conference on Friday that Pakistan would not default and continue to make foreign debt repayments on time.