Finance Minister Miftah Ismail stated on Thursday that the government has completed a $2.3 billion refinancing agreement with Chinese banks, easing external pressure and bolstering the country’s diminishing foreign exchange reserves.
“The terms and circumstances for refinancing of RMB 15 billion deposit by Chinese banks (about US$ 2.3 billion) have been agreed,” he said in a tweet.
“After some regular permissions from both sides, inflow is expected shortly.” The finance minister stated, “This will assist shore up our foreign exchange reserves.”
Good News: The terms and conditions for refinancing of RMB 15 billion deposit by Chinese banks (about US$ 2.3 billion) have been agreed. Inflow is expected shortly after some routine approvals from both sides. This will help shore up our foreign exchange reserves.
— Miftah Ismail (@MiftahIsmail) June 2, 2022
Pakistan is in a precarious economic condition as it continues to negotiate with the International Monetary Fund (IMF) to resurrect a dormant Extended Fund Facility. The IMF noted out ‘deviations’ on fiscal sides from the measures adopted in the previous review at their most recent meeting.
As a result, no consensus at the staff level was obtained. To meet programme objectives, the Fund emphasised the importance of tangible policy steps, particularly the removal of fuel and energy subsidies and the fiscal year 2023 budget.
Last week, the government partially eliminated the gasoline subsidy and raised the price of petroleum goods by Rs30 per litre to demonstrate its commitment to restoring the programme.