March 29, 2023
Economy Pakistan

China Provides $1.3 Billion Financing Boost to Pakistan

Pakistan’s Finance Minister, Ishaq Dar, announced on March 3 that the Industrial and Commercial Bank of China Ltd (ICBC) will provide a $1.3 billion financing boost to Pakistan’s foreign exchange reserves. The fund will help Pakistan address its challenging economic conditions. Dar confirmed that all formalities have been completed, and the documentation process is now finished.

According to Dar, $500 million could be received by Monday or Tuesday of next week, with an additional $500 million to be provided within the following ten days. The State Bank of Pakistan (SBP) currently holds $3.82 billion in foreign exchange reserves, with commercial banks adding up to a total of almost $9.26 billion.

Dar is confident that the SBP reserves will reach $10 billion, and the national reserves will total around $16 billion by June 30. Pakistan’s requirement for the next three to four years is $16 billion, according to Dar. He expressed gratitude to China for its assistance and described it as a “great friend.”

Dar emphasized that Pakistan has never defaulted and will not do so now, despite the challenging economic climate. He defended the current government’s handling of the crisis, stating that its “principled decision” to prioritize the state’s interests over political interests was the right decision. Dar criticized opposition leader Imran Khan, accusing him of being “selfish” and only focused on criticizing the government rather than working together to address the country’s issues.

Dar also discussed Pakistan’s recent economic indicators, attributing the current situation to “mismanagement and bad governance.” He cited the catastrophic floods in 2022 as a significant cause of financial losses, with over $30 billion lost as a result. Global inflationary pressure was also a major reason for the country’s rising inflation levels, according to Dar.

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