Miftah announces $2.3 billion loan deal with Chinese consortium, inflows expected ‘within days’
Finance Minister Miftah Ismail said on Wednesday that a Chinese consortium of banks and Pakistan had signed a $2.3 billion (15 billion renminbi) loan facility agreement, with cash inflow expected in “A few days”.
The minister made the announcement on Twitter, saying the deal was signed yesterday by the Pakistani side. “We thank the Chinese government for facilitating this transaction,” Ismail said.
Foreign Minister Bilawal Bhutto-Zardari also expressed his gratitude to Chinese leaders. “The people of Pakistan are grateful for the continued support of our all-time friends,” he said.
Earlier this month, the finance minister shared the “good news” that the terms and conditions for the refinancing of the deposit by Chinese banks had been agreed. At the time, he said the loan would help “strengthen our foreign exchange reserves”.
On June 2, at a press conference, Ismail said that China withdrew the loan on March 25 and set tough conditions under which Pakistan could not use the funds.
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However, he went on to say that after a visit by Foreign Minister Bilawal Bhutto-Zardari and Prime Minister Shehbaz Sharif’s follow-up talks with Prime Minister Li Keqiang, the Chinese side not only agreed to defer the amount, but had also done so. at a cheaper interest rate of 1.5% plus the Shanghai Interbank Offered Rate (Shibor) instead of the previous 2.5% plus Shibor.
In today’s announcement, Ismail did not provide further details of the agreement with the consortium.
The development comes after reports surfaced of an agreement between Pakistan and the International Monetary Fund (IMF). It will also support Pakistan’s dwindling cash reserves, which stand at $8.99 billion, according to central bank data.
Earlier, the minister said that an agreement with the IMF would pave the way for obtaining loans from other multilateral organizations. Even China had tied any loans to the IMF program stimulus, he said in May.