Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Tuesday, May 30, 2023

Cash-Strapped Pakistan To Receive $500 Million From Chinese Bank

Cash-Strapped Pakistan To Receive $500 Million From Chinese Bank

Chinese banks have already provided re-financing of USD 1.2 billion in commercial loans in the past few weeks.
A Chinese bank has assured Pakistan that it will provide another refinanced USD 500 million loan within the next few days, bringing the total of commercial loans up to USD 1.7 billion out of the total committed amount of USD 2 billion, The News International reported.

The Pakistani authorities are running from pillar to post to get 100 per cent confirmation from friendly donor countries and multilateral creditors before moving toward striking a staff-level agreement with the International Monetary Fund (IMF). It was an unwritten condition from the IMF that Pakistan must secure the refinancing of commercial loans as well as a rollover on deposits from China during the programme period, which is scheduled to expire in June 2023.

"Another USD 500 million commercial loan is coming from a Chinese bank," a top official of the Pakistan Finance Division confirmed on Wednesday and added that it would be done soon, The News International reported.

Chinese banks have already provided re-financing of USD 1.2 billion in commercial loans in the past few weeks, and now Beijing has given an assurance on another USD 500 million in loan re-financing in the next few days.

It is relevant to mention that Pakistan had also requested to grant rollover on the Chinese SAFE deposit of USD 2 billion within the ongoing month.

All these, the refinancing of commercial loans and rollovers on SAFE deposits, are pre-requisite for moving towards the signing of a staff-level agreement between the IMF and Pakistani side.

Now Pakistani authorities are anxiously waiting for confirmation from the Kingdom of Saudi Arabia, the UAE, and Qatar, as well as from the World Bank and the Asian Infrastructure Investment Bank (AIIB), for fulfilling their external financing needs of USD 6 billion until the end of June 2023, The News International reported.

The guarantees for securing external financing are crucial for the sustainability of the IMF programme, as it is quite hard for the State Bank of Pakistan to jack up its foreign exchange reserves to USD 8-10 billion by the end of June 2023. Though the staff had projected them at USD 16 billion in August 2022, in the aftermath of completing the seventh and eighth reviews under the USD 6.5 billion Extended Fund Facility.

It will be quite difficult for the IMF staff to defend a 50 per cent reduction in the foreign exchange reserves held by the State Bank of Pakistan (SBP) when there have been no shocks to the economy of Pakistan on the external front. But Pakistani authorities argued that the flash floods had struck many parts of Pakistan, causing USD 30 billion in losses to the economy.

There is one good news for Pakistan's economy: Brent crude is down at USD 74.39 and West Texas Intermediate (WTI) is down at USD 68.16 per barrel in the international market.

Meanwhile, the IMF secretly launched "Inclusive growth in the Middle East/North Africa (MENA) region" here at the National University of Sciences & Technology (NUST) on Wednesday, in which presentations made by the IMF high-ups who argued that wherever state-owned enterprises (SOEs) possessed a major footprint, it resulted in the crowding out of the private sector.

Pakistan's budget makers also assured the IMF that they would be preparing gender-based budgeting in the next financial year.

At a time when the IMF is dwelling on its focus on inclusive growth in its launched books, practically under the IMF's tight scrutiny, the development budget of the federal government, known as the Public Sector Development Program (PSDP), was slashed by 50 per cent for the current fiscal year in line with the Fund's demand to curtail the budget deficit target.

To fulfil the IMF's demands, the consumer price index (CPI) -based and Sensitive Price Indicator (SPI)- based inflation has gone up to unprecedented levels of 31.5 per cent every month, and 42.3 per cent every week.
Newsletter

Related Articles

Hong Kong News
Close
0:00
0:00
Nvidia CEO Huang says firms, individuals without AI expertise will be left behind
WPP Revolutionizes Advertising with NVIDIA's AI Powerhouse
Two US Employees Fired For Chasing Robbers Out Of Store As They Broke ''Company Policy''
Pfizer, the EU, and disappearing ink - Smoke, Mirrors, and the Billion-Dose Pfizer Vaccine Deal: EU's 'Open Secret
The Sussexes' Royal Rebound: Could Harry and Meghan Markle Return to the UK?
A provocative study suggests: Left-Wing Extremism and its Unsettling Connection to Psychopathy and Narcissism
Neuralink Receives FDA Approval for First-in-Human Clinical Study
Ukrainian Intelligence Official Admits to Assassination Attempts on Putin
WATCH THIS: democracy in Russia is so bad!
Ed Davey: It is possible for a woman to have a penis
Bernard Arnault Loses $11.2 Billion in One Day as Investors Fear Slowdown in US Growth Will Reduce Demand for Luxury Products
Russian’s Wagner Group leader: “I am not a chef, I am a butcher. Russia is in danger of a revolution like in 1917.”
TikTok Sues Montana Over Law Banning the App
Ron DeSantis Jumps Into 2024 Presidential Race, Setting Up Showdown With Trump
Steve Jobs introducing Apple's iPhone, exactly 16 years ago.
Banking Behemoth vs Ex-Boss: The PMorgan-Epstein Entanglement
China overtakes Japan as world's top car exporter
Talks between US House Republicans and President Biden's Democratic administration on raising the federal government's $31.4tn debt ceiling have paused
Biden Administration Eyeing High-Profile Visits to China: The Biden Administration is heating things up by looking into setting up a series of top-level visits to Beijing by top officials in the coming months
New evidence in special counsel probe may undercut Trump’s claim documents he took were automatically declassified
A French court of appeals confirmed former President Nicolas Sarkozy's three-year jail term for corruption and influence peddling
Debt Ceiling Crises Have Unleashed Political Chaos
Weibao Wang, a former software engineer at Apple, was charged with stealing trade secrets related to autonomous systems, including self-driving cars
Mobile phone giant Vodafone to cut 11,000 jobs globally over three years as new boss says its performance not good enough
Elon Musk compares George Soros to Magneto, the supervillain from the Marvel Comics series.
Warren Buffett Sells TSMC Shares Over Concerns About Taiwan's Stability
New Study Finds That Secondary Bacterial Pneumonia Is a Major Cause of Death in COVID-19 Patients Who Require Ventilator Assistance
The official tapes of Trump's deposition in the E. Jean Carroll battery (rape) and defamation case have been released.
King Charles III being crowned.
Newly released video of Donald Trump’s rape trial deposition:
Video: Ukraine MP Punches Russian Representative At Global Meet
El Paso mayor has declared a state of emergency
Russia accused Ukraine of attacking the Kremlin with drones in an attempt to kill Putin
Dutch court orders man who fathered 550 kids to stop donating sperm
Kim Kardashian Lookalike Christina Ashten Dies Of Cardiac Arrest, Hours After Plastic Surgery
Samsung has banned employees from using generative AI services such as ChatGPT
'Godfather Of AI' Geoffrey Hinton Quits Google To Warn Of The Tech's Dangers
A Real woman
Vermont Man Charged with Stalking After Secretly Tracking Woman with Apple AirTag
Elon Musk Statements About Tesla Autopilot Could Be 'Deepfakes,' Lawyers Claim. Judge Evette Pennypacker Does Not Understand How Far and Advanced This Technology Became
Ukraine More Prepared for Counterattack as Reinforcements Arrive
Tucker Carlson is back, soon!
China Unveils Construction Road Map for Lunar Research Station
NetEase Launches Low-Code Platform to Help Businesses Develop Custom Apps
AT&T's Successful Test of Satellite-Based Phone Call Raises Possibility of Widespread Coverage
CNN: "Joe Biden is asking for four more years — when 74% of Americans think the country is heading the wrong way“
Turkish President Recep Tayyip Erdogan Cuts Short Live TV Interview Due to Health Issue
5 men dressed as women agree that ALL white people are racist.
President Biden announced his campaign to run for a 2nd term.
Justin Trudeau vs. Trudeau Justin
×