ISLAMABAD – The federal government has rejected media reports that it is planning to get loans worth $5 billion from three countries, including China, in a bid to stabilise country’s foreign exchange reserves.
A statement issued by the Ministry of Economic Affairs said, “This is to clarify that no such proposal is under process in the Economic Affairs Division for obtaining $3 billion loan from China and $2 billion loan from Russia & Kazakhstan”.
Earlier, reports claimed that that the PTI-led government will borrow $3 billion from China and $2 billion from Russia and Kazakhstan.
Reports further said that the Ministry of Finance has finalised a plan in this regard as Prime Minister Imran Khan is likely to sign the loan agreement during his visit to China in February.
The premier will pay a three-day visit to China from February 3 to attend the opening ceremony of the Winter Olympics Games, Beijing 2022 in show of solidarity with Beijing as West has announced diplomatic boycott of the event.
The media reports said that $3 billion will be channeled into foreign reserves to make them stable while the remaining $2 billion will be spent on the ML-1 Railways project.
Meanwhile, Economic Affairs Division (EAD) has denied the government was planning to secure $5 billion from China, Russia and Kazakhstan.
Reserves held by the State Bank of Pakistan (SBP) declined by $562 million to $17.03bn in the week ending on Jan 14.
The central bank used its foreign exchange reserves to repay its international debt.
The reports emerged as Islamabad is making efforts to revive the $6 billion loan programme of the International Monetary Fund (IMF) as all the prior conditions regarding the autonomy of the central bank and others have been implemented.
The IMF’s Executive Board is scheduled to meet on February 02.