China rolls over $2 billion safe deposits loan for Pakistan
ISLAMABAD – China okayed the rollover of $2 billion State Administration of Foreign Exchange (SAFE) deposits for one year.
Federal Finance Minister Ishaq Dar announced this while talking to a private publication.
It was one of the requirements of the IMF for getting the rollover of Chinese SAFE deposits for meeting external financing needs in order to move towards striking the much-awaited staff-level agreement.
There are nine tables under the Memorandum of Economic and Financial Policies (MEFP) that require to be filled.
IMF has asked Pakistan to bridge the gap of $6 billion is simply an attempt to ensure its credibility. Non-materialisation may result in Pakistan sliding into default.
The Fund was forced to put forth this condition on the negotiating table largely because representatives of Gulf countries on the Executive Board had made commitments before the approval of the seventh and eighth reviews for providing financial assistance to Islamabad in different forms. These included additional deposits and investments.
Now, all eyes are on the Kingdom of Saudi Arabia (KSA), the UAE and Qatar to bail out Pakistan’s struggling economy.
Only China had come forward to rescue Islamabad by fulfilling its commitments on the re-financing of its commercial loans as well as the rollover of its SAFE deposits.