ISLAMABAD – Pakistan has reached an agreement on terms and conditions withChinese banks to refinance an amount of nearly $2.3 billion, country’sFinance Minister Miftah Ismail said on Thursday.
Amid a mounting import bill and depleting foreign exchange reserves,Pakistan has been facing a massive current account deficit and desperatelyneeds external financing.
“The terms and conditions for refinancing of RMB 15 billion deposit byChinese banks (about $ 2.3 billion) have been agreed,” the finance ministerannounced in a Twitter post. “Inflow is expected shortly after some routineapprovals from both sides.”
“This will help shore up our foreign exchange reserves,” he added.
Ismail also held meetings with officials of the World Bank andInternational Monetary Fund (IMF) in April soon after the arrival of thenew government.
He asked the IMF management for the resumption of a loan programmeamounting to $6 billion while urging it to increase its size to $8 billionand extend its duration for another year.
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Though the government has tried to meet some of its key conditions byraising fuel prices and power tariffs, the international lending agency hasnot released the next loan installment of about $1 billion so far.
Ismail said in April he was keen to secure the IMF deal since it would alsohelp Pakistan unlock external financing from other multilateral donors.
Financial experts also maintain the government is not likely to getrequisite support from other countries, including China, without theresumption of the IMF loan.