LAHORE: As foreign exchange reserves squeeze, Pakistan has reached out toChina asking for more loans to avoid a foreign currency crisis.

According to a report in the *Financial Times, *Pakistan cautioned China ifthe loans dry up Beijing’s $60 billion investment in China-PakistanEconomic Corridor could be under threat.

In the first ten months of FY18, China lent Pakistan $1.5 billion inbilateral loans and it also received $2.9 billion in commercial bank loansmostly from Chinese banks.

Pakistani officials have told their Chinese counterparts in case thecountry seeks a bailout from the IMF, details of CPEC and how it is beingfunded will have to be shared with them and force it to cancel some of theinfrastructure projects already planned.

In a statement to FT, one government official said We had a detaileddiscussion with the Chinese and we shared our concern. The main issue isthat once we are locked in an IMF programme, we will have to make fulldisclosure of the terms on which China has agreed to build the CPEC.”

The country’s foreign exchange reserves have been sliding since the pasttwo years, as remittances fall, and imports increased.

However, the fall has accelerated in the last few months partly due torising oil prices which has increased prices of imported goods.

In 2019, the pressure would be further ratcheted up as Pakistan would needto make $12.7 billion of external repayments against $7.7 billion this year.

Last week, *Reuters *reported China had loaned Pakistan $1 billion due toplummeting foreign exchange reserves as pressure to seek a bailout from theIMF grows.

This indicates Pakistan’s growing dependence on Chinese loans to buffer itsforeign currency reserves, which plunged to $9.66 billion last week from$16.4 billion in May 2017.

Fitch issued a warning last week saying declining forex reserves and risingcurrent account deficit was adding to Pakistan’s burgeoning externalfinancing risks.