Pakistan is expected to receive a $3.3 billion funding package from Chinese banks in the next few days, government officials have confirmed. This package includes two parts: a $2 billion syndicated loan and a $1.3 billion refinancing deal.
The syndicated loan will be for a period of three years and will be arranged by a group of Chinese banks. The $1.3 billion refinancing is meant to repay a commercial loan previously taken from the Industrial and Commercial Bank of China (ICBC).
This funding is expected to give a major boost to Pakistan’s foreign exchange reserves. Currently, the State Bank of Pakistan holds $11.7 billion in reserves as of June 13. With this new inflow, the reserves are expected to rise to more than $14 billion by the end of June.
The main purpose of these funds is to help the government repay its short-term domestic loans by early July. Although the exact details about the currency in which the funds will be received have not been shared yet, the government believes this financial support will ease some of the economic pressure in the short term.
This deal is seen as a positive step for Pakistan’s economy as it tries to manage debt repayments and stabilize its financial position. It also reflects the continued support from China, a key economic partner.
As Pakistan looks to avoid default and maintain financial stability, this funding could offer much-needed breathing room during a challenging period for the country’s economy.
