ISLAMABAD: Finance Minister Ishaq Dar said that Pakistan has got assurances of a $13 billion financial package from China and Saudi Arabia, including $5.7 billion in fresh loans.
According to the details, the $13 billion package is equal to 38% of the estimated gross external financing requirements of Pakistan for the fiscal year 2022-23.
Its materialisation can eliminate the threat of default, as the International Monetary Fund (IMF) has not come up with a big financial package despite imposing numerous harsh conditions.
Pakistan sought $7.3 billion debt rollover and a fresh loan of $1.5 billion from China, which the Chinese premier had assured to take care of, Dar told a group of journalists a day after his return from Beijing.
The cumulative loan that Pakistan has sought from China amounts to $8.8 billion. Dar disclosed that he also requested his Saudi counterpart for a $4.2 billion in fresh loan. “The Saudi finance minister also gave “a positive nod”, he added.
Dar said that he also requested his Saudi counterpart for a $4.2 billion in fresh loan. “The Saudi finance minister also gave “a positive nod”, he added.
The cumulative value of the Chinese and Saudi financial assistance would cover 38% of Pakistan’s estimated gross external financing requirements. The injection is expected to recoup the lost value of the rupee.
Dar said that the real inflation-adjusted value of the rupee was below Rs200 to a dollar, hoping to see a stronger value of the local currency without any injection.
To a question, the finance minister said that the IMF had not yet finalised the dates for the staff-level talks. However, he expected that the visit would take place this month.
The minister returned from Beijing from Shehbaz’s first visit to China as the prime minister. Shehbaz met with Chinese President Xi Jinping and the premier Li Keqiang.
Dar termed the visit highly successful, which helped revive the China-Pakistan Economic Corridor (CPEC). He said that during the meetings with the Chinese premier, he was requested to give a $1.5 billion new loan through the currency-swap arrangement.
“I requested China to increase the limit of the trade facility from 30 billion Yuan to 40 billion Yuan”, the minister said. The existing 30 billion worth facility is equal to $4.5 billion, which after the increase would jump to $6 billion.
Dar stated that Pakistan also requested China to roll over its $7.3 billion debt that was maturing in the next eight months, as part of its overall plan to arrange $34 billion in the current fiscal year.
“The $3.3 billion Chinese commercial loans and $4 billion worth SAFE deposits loans were maturing from now till June next year and we have sought rollover,” said Dar.
The government sought the rollover of the $4 billion SAFE deposit for more than one year.