China Likely To Lend Another $2.5 Billion To Pakistan


This will take the Chinese aid to Pakistan in the current fiscal year to $4.5 billion as China earlier gave $2 billion.
Lahore (WebPaki/ Pakistan News – 3rd February, 2019) China has agreed to provide $2.5 billion in loans to Pakistan, an English newspaper reported on Saturday.

“Beijing will place the $2.5 billion in deposits with the central bank,” a top government functionary told The Express Tribune.

This will take the Chinese aid to Pakistan in the current fiscal year to $4.5 billion as China earlier gave $2 billion.

The Chinese loan will shore up the country’s foreign exchange reserves and prevent further devaluations of the rupee against the Dollar.

The current foreign exchange reserves are not sufficient to provide cover to even two months of imports despite receiving $4 billion loans from Saudi Arabia and UAE.

The expected financial support signals deepening economic ties between China and Pakistan even as Islamabad is negotiating with the IMF for a potential $7bn to $8bn loan.

Pakistan’s foreign reserves, at $7.3bn, have dropped to about one and a half months of import cover, regarded as a critically low level, said economists.

After decades of close military co-operation, Beijing has been stepping up financial support for Pakistan, with Chinese state-backed banks lending $4bn to Islamabad in the year ending June 2017.

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