Chinese Bank approves rollover of US $1.3 billion for Pakistan.

ISLAMABAD -- In a significance move, China Saturday approved rollover of $1.3 billion loan for Pakistan after completing the necessary formalities, which would help build country's much low foreign exchange reserves.

'Formalities completed and Chinese Bank, ICBC approved rollover of US$1.3 billion facility which has been repaid by Pakistan to ICBC in recent months. Facility will be disbursed in 3 installments; first one of US$500 million has been received by SBP. It will increase forex reserves,' Finance Minister Ishaq Dar said on Twitter. Pakistan had already received much needed $700 million from China in last week. Overall financing from the friendly country would reach to $2 billion.

The inflow of $700 million had helped in increasing the foreign exchange reserves. The total liquid foreign reserves held by the country stood at $ 9.267 billion as of 24th February, 2023. Foreign reserves held by the State Bank of Pakistan are $ 3.814 billion and foreign reserves held by commercial banks are $ 5.453 billion. 'During the week ended on 24th February, 2023, SBP received $ 700 million as GoP commercial loan disbursement from China. After accounting for external debt repayments, SBP reserves increased by $ 556 million to $ 3,814.1 million,' the SBP stated.

Meanwhile, the government is expecting to finalise staff level agreement with International Monetary Fund (IMF) in next week, which would pave way for getting loan tranche of above one billion dollars. It would also help in getting loan from friendly countries including Saudi Arabia and United Arab Emirates (UAE).

According to the latest data of ministry of Economic Affairs, Pakistan borrowed $6.134 billion from multiple financing sources during the first seven months (July-January) of 2022-23. The...