ISLAMABAD – China has rescued Pakistan yet again in the time of economiccrisis.
China has pledged to lend at least US$2 billion to Pakistan to shore up itsforeign exchange reserves and prevent further devaluations of the rupeeagainst the dollar, Financial Times reported.
According to a report published in the Financial Times, the financialsupport, which is not being publicly announced by China, comes as thegovernment of Prime Minister Imran Khan is struggling with a weakeningfiscal position, high debt repayments and dwindling reserves.
“China’s promise to Pakistan is an indication of their commitment to helpus avoid a crisis. If the rupee falls sharply and we need to prevent itsslide, we can turn to China,” the tabloid added.
The promised financial support signals deepening economic ties betweenChina and Pakistan even as Islamabad is negotiating with the IMF for apotential $7bn to $8bn loan.
Read Top Stories
Pakistan’s finance ministry and the IMF are due to resume discussions laterthis month on details of the package, which is expected to come with toughconditions, such as slimming down the country’s bloated state-ownedenterprises through job cuts.
The rupee has lost more than a fifth of its value against the dollar sincelate 2017 and Fitch has cut Pakistan’s debt rating deeper into junkterritory last month.
