Cash-strapped Pakistan receives $500 million from Chinese bank

Pakistan Chinese bank
Image courtesy: AAMIR QURESHI/AFP via Getty Images)

Islamabad: In a major boost to the forex reserves of Pakistan, Finance Minister Ishaq Dar late on Friday confirmed that Pakistan had received $500 million from the Industrial Commercial Bank of China (ICBC).

Taking to Twitter, the financial czar said that the Chinese bank had agreed to rollover the $1.3 billion facility, which was paid by the cash-strapped South Asian country in recent months.

The facility will be disbursed in three instalments. The first one of $500 million has been received by the State Bank of Pakistan, Dar said in a tweet.

“It will increase forex reserves,” he added.

According to the State Bank of Pakistan (SBP), the country’s forex reserves shot up by $555.6 million towards the end of last month as China came to the rescue of its all-weather friend in the most needed time with a crucial refinancing.

According to data shared by the State Bank of Pakistan, during the week that ended on February 24, 2023, the SBP-held forex reserves shot up sharply by $555.6 million to reach $3.814 billion. 

However, those held by commercial banks dropped marginally by $15 million to clock in at $5.453 billion.

During the period under review, the SBP received $700 million as the government of Pakistan commercial loan disbursement from China. However, after accounting for external debt repayments, the SBP reserves increased by $555.6 million