| Welcome to Global Village Space

Saturday, May 18, 2024

Pakistan recieves $500 million from ICBC

Finance Minister confirmed that the Industrial and Commercial Bank of China Ltd approved a rollover of a $1.3 billion loan for cash-strapped Pakistan, which will help shore up its depleting forex reserves.

The Finance Minister, Ishaq Dar said that the fund will be disbursed in three installments and the first installment of $500 million has been received by the State Bank of Pakistan. This will help increase the foreign exchange reserves, he said in a tweet.

Moreover, the minister urged that the disbursement from ICBC is crucial for the country’s economy as it is facing a balance of payment crisis. Similarly, the foreign exchange reserves are dropping to a critically low level which is barely enough to cover three weeks of controlled imports.

Pakistan being a cash-strapped country, faced growing economic challenges such as high inflation, declining forex reserves, a widening current account deficit, and a depreciating currency. 

Read more: China approves $ 700 million loan for Pakistan

The minister said;

“Formalities completed [and] Chinese Bank, ICBC approved rollover of $1.3 billion facility which has been repaid by Pakistan to ICBC in recent months,” 

Furthermore, Pakistan has made payments of around $5.5 billion including $2 billion to the China Development Bank and ICBC and $3.5 billion have been given to banks in other countries, the minister confirmed. 

He also said Pakistan will need $5 billion in external financing to close its financing gap this fiscal year, which ends in June. 

Read more: Pakistan-IMF to reach an agreement next week

The minister further said that more external financing will be coming to Pakistan after the country signs a deal with the International Monetary Fund (IMF), which is likely to be done next week. The Fund and the country have been negotiating a deal for a $1.12 billion stalled program since early last month. 

The minister said; 

“We will, God willing, take this country out of this quagmire,”