Government is eyeing a $13 billion package, Following the Prime Minister’s trip to China,
ISLAMABAD:
Finance Minister Ishaq Dar said on Friday that Pakistan has received a $13 billion financial package from China and Saudi Arabia, including $5.7 billion in fresh loans, which would assist stabilize the reserves and the rupee.
As a percentage of Pakistan’s projected gross foreign funding needs for the fiscal year 2022-23, the $13 billion package represents 38 percent.
In light of the IMF’s failure to produce a sizable financial package despite imposing a number of stringent criteria, its realization can remove the risk of default.
Dar told a gathering of journalists a day after his return from Beijing that Pakistan has asked China to roll over $7.3 billion in debt and provide a new credit of $1.5 billion.
Pakistan has requested a total of $8.8 billion in loans from China.
Dar revealed that he had also requested a fresh loan of $4.2 billion from his Saudi counterpart.
He further mentioned that the Saudi minister of finance has given “a favorable signal.”
Three eights of Pakistan’s projected gross external funding needs might be met by the combined value of financial assistance from China and Saudi Arabia. The government’s spending plan is meant to restore the rupee’s lost worth.
Dar stated that the real worth of the rupee, after adjusting for inflation, was less than Rs200 to a dollar, expressing his desire to see a higher value of the local currency without foreign infusion.
In response to a question, the finance minister indicated that the IMF had not yet settled on dates for the staff-level meetings. It was this month, though, that he had anticipated the visit to occur.
After Shehbaz’s first trip to China as prime minister, the minister returned from Beijing. Shehbaz spoke with both Xi Jinping and Li Keqiang, the president and prime minister of China, respectively.
According to Dar, the trip was a huge success and sparked new life into the China-Pakistan Economic Corridor (CPEC). He claimed the Chinese leader had asked him to make a $1.5 billion loan through a currency swap during their talks.
The minister pleaded with China to extend the trade facility’s limit from 30 billion Yuan to 40 billion Yuan. After the expansion, the current $4.5 billion facility’s value of 30 billion would rise to $6 billion.
According to the State Bank of Pakistan, Pakistan paid more than Rs26 billion in interest to China in the fiscal year 2021 for using a $4.5 billion Chinese trade finance facility to cover the maturing debt.
