Islamabad: Finance Minister Ishaq Dar said that State Bank of Pakistan (SBP) has received $ 700 million in funds from China Development Bank (CDB) in much-needed financial support as country continues to reel from worsening economic crisis. He took to Twitter to make announcement. “Funds $ 700 million received today by State Bank of Pakistan from China Development Bank”.

In an earlier tweet, Dar had maintained that loan would “Shore up” Pakistan’s foreign exchange reserves. Earlier this month, country’s foreign exchange reserves slipped to alarming level of below $ 3 billion for first time in nine years, reducing import capacity to slightly over two weeks. As government seeks to revive International Monetary Fund programme, Pakistan has sought to secure assurances from Saudi Arabia and China for more loans. In November, Dar claimed to have secured $ 13 billion bailout from China and Saudi Arabia with $ 5.7 billion in fresh loans. Dar was confident that cash would come before IMF programme revival. However, it became clear with time that Islamabad’s old allies refused to dole out more cash without country first agreeing to Fund’s conditions.

That was when Pakistan had to invite IMF mission to negotiate deal. Earlier this month, the country's foreign exchange reserves slipped to the alarming level of below $3 billion for the first time in nine years, reducing import capacity to slightly over two weeks. As the government seeks to revive the International Monetary Fund (IMF) programme, Pakistan has sought to secure assurances from Saudi Arabia and China for more loans. Devastating floods last year and repeated bouts of political turmoil have left the country struggling to pay for basic goods and at serious risk of joining the list of defaulters. It desperately needs the IMF to release an overdue tranche of $1.1 billion from an existing bailout programme.

The country's finance secretary has said he hopes talks with the Fund can be wrapped up this week. But with its debt-to-GDP ratio already in the 70% danger zone and between 40% and 50% of the government revenues earmarked for interest payments alone this year, it will soon need more.

Published in The Daily National Courier, February, 25 2023

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