Posted on

U.S. initiates investigation in auto import

WASHINGTON (Reuters) – The Trump administration has launched a national security investigation into car and truck imports that could lead to new U.S. tariffs similar to those imposed on imported steel and aluminum in March.

The national security probe under Section 232 of the Trade Expansion Act of 1962 would investigate whether vehicle and parts imports were threatening the industry’s health and ability to research and develop new, advanced technologies, the Commerce Department said on Wednesday.

“There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” Commerce Secretary Wilbur Ross said in a statement, promising a “thorough, fair and transparent investigation.”

Higher tariffs could be particularly painful for Asian automakers including Toyota Motor Corp (7203.T), Nissan Motor Co (7201.T), Honda Motor Co (7267.T) and Hyundai Motor Co (005380.KS), which count the United States as a key market, and the announcement sparked a broad sell-off in automakers’ shares across the region. [MKTS/GLOB]

The governments of Japan, China and South Korea said they would monitor the situation, while Beijing, which is increasingly eyeing the United States as a potential market for its cars, added that it would defend its interests.

“China opposes the abuse of national security clauses, which will seriously damage multilateral trade systems and disrupt normal international trade order,” Gao Feng, spokesman at the Ministry of Commerce, said at a regular news briefing on Thursday which focused largely on whether Beijing and Washington are making any progress in their growing trade dispute.

 “We will closely monitor the situation under the U.S. probe and fully evaluate the possible impact and resolutely defend our own legitimate interests.”

The probe comes as Trump courts voters in the U.S. industrial heartland ahead of mid-term elections later this year, and opens a new front in his “America First” trade agenda aimed at clawing back manufacturing jobs lost to overseas competitors.

It could raise the costs for overseas automakers to export vehicles and parts to the world’s second-largest auto market.

Growing trade tensions over cars and car parts, particularly with China, could raise risks for U.S. companies expanding their presence in the country, signs of which are already emerging.

Earlier this month, Reuters reported that Ford Motor Co’s (F.N) imported vehicles were being held up at Chinese ports, adding to a growing list of U.S. products facing issues at China’s borders.

The majority of vehicles sold in the United States by Japanese and South Korean automakers are produced there, but most firms also export to the U.S. from plants in Asia, Mexico, Canada and other countries.

Roughly one-third of all U.S. vehicle imports last year were from Asia.

In addition to recently imposed 25 percent tariffs on steel and 10 percent tariffs on aluminum imports, the administration has threatened tariffs on $50 billion worth of Chinese goods over intellectual property complaints, and Beijing has vowed to respond.

The administration is also trying to renegotiate the North American Free Trade Agreement to return more auto production to the United States.

Commerce said the new probe would determine whether lost domestic production had weakened the U.S. “internal economy” and its ability to develop connected vehicle systems, autonomous vehicles, fuel cells, electric motors and batteries, and advanced manufacturing processes.

In a separate statement, President Donald Trump said: “Core industries such as automobiles and automotive parts are critical to our strength as a Nation.”

A Trump administration official said before the announcement that the expected move was aimed partly at pressuring Canada and Mexico to make concessions in talks to update the NAFTA that have languished in part over auto provisions, as well as pressuring Japan and the European Union, which also export large numbers of vehicles to the United States.

An ad hoc industry group representing the largest Japanese, German and other foreign automakers called “Here for America,” criticized the effort.

“To our knowledge, no one is asking for this protection. This path leads inevitably to fewer choices and higher prices for cars and trucks in America,” said John Bozzella, chief executive of Global Automakers, a trade group representing Toyota, Nissan Motor Co Ltd (7201.T), Hyundai Motor Co (005380.KS) and others.

A Toyota spokeswoman said that the company was monitoring the situation.

Chinese automaker Geely Holding Group urged free trade practices for the auto industry, which is built on a complex supply chain under which vehicle components for any given car often originates from numerous countries.

“As a global manufacturer, Geely Holding Group is in favor of free trade and open markets. Free trade creates jobs, wealth and economic growth,” a spokesman said, adding that its plant in South Carolina to produce its Volvo brand cars showed its commitment to the country.

Shares in Toyota, Honda and Hyundai each fell roughly 3 percent in local trade following the announcement, while Mazda Motor Corp (7261.T), which does not have any U.S. production capacity at the moment, tumbled more than 5 percent.

Late last week, Japan’s automakers’ association urged its export partners to keep tariffs on vehicles and components low and maintain free trade relationships.

Roughly 12 million cars and trucks were produced in the United States  last year, while the country imported 8.3 million vehicles worth $192 billion. This included 2.4 million from Mexico, 1.8 million from Canada, 1.7 million from Japan, 930,000 from South Korea and 500,000 from Germany, according to U.S. government statistics.

At the same time, the United States exported nearly 2 million vehicles worldwide worth $57 billion.

German automakers Volkswagen AG (VOWG_p.DE), Daimler AG (DAIGn.DE) and BMW AG (BMWG.DE) all have large U.S. assembly plants. The United States is the second-biggest export destination for German auto manufacturers after China, while vehicles and car parts are Germany’s biggest source of export income.

Asked if the measures would hit Mexico and Canada, a Mexican source close to the NAFTA talks said: “That probably is going to be the next battle.”

Posted on

Wales’ rail and Metro franchise to be run by KeolisAmey

LONDON (BBC News): A £5bn contract to run Wales’ rail service for the next 15 years has been awarded to two European firms, who will run it jointly.

France’s Keolis and Spanish-owned Amey’s bid triumphed over a rival offer from Hong Kong’s MTR commuter railways.

It will also drive forward the south Wales Metro in Cardiff and the valleys.

The operators said while the changes would not happen overnight Wales’ railway “would be unrecognisable” in five years time.

KeolisAmey already runs Greater Manchester Metrolink and London’s Docklands Light Railway, among others.

But full details of its plans for Wales will not be revealed until next month.

This is to allow for the potential challenge to the process by the other bidder.

An official announcement was made on Wednesday after a bidding process which started with four companies.

Arriva Trains Wales (ATW), which has run the Wales and Borders franchise since 2003, pulled out of the running in December.

Keolis is France’s largest private sector public transport operator – but its major shareholder is state-owned railway SNCF.

Amey was a one-time UK company bought by the Spanish infrastructure giant Ferrovial, which is the key shareholder and manager of Heathrow airport.

KeolisAmey is expected to have included other forms of transport – including so-called “active” travel like cycling – in its overall proposals.

There is £5bn earmarked over the next 15 years for the Metro, to improve public transport across the south Wales region and includes taking over control from Network Rail and upgrading the Valleys lines.

Their vision for meeting this challenge – when it is eventually unveiled – will be of particular interest to business and commuters alike.

But they have already promised “transformative solutions” for all in Wales and future generations.

The new franchise will come into effect from 14 October but all 2,200 ATW staff will be able to transfer and terms and conditions will be protected.

ATW’s managing director Tom Joyner said it had been a “privilege” to operate the services.

He said they would work to ensure as smooth a transition as possible.

In fairness to ATW, the contract awarded to it by the UK government assumed there would be no growth in passengers over a 15-year period when in fact the numbers doubled.

That stretched services.

The Welsh Government has been an ATW critic at times but reaching the point where Cardiff rather than London would make the decisions over who would run rail services in Wales has not been straightforward.

There were a number of disputes between both governments, including over funding, before the power to award this franchise was devolved.

The bidding process has been expensive for all the companies involved.

This is a major investment and after the last 15 years it is clear how strongly people care about rail services.

There is certain to be a lot of attention in future on KeolisAmey, the Welsh Government and TfW, the arms length company set up to oversee it, to ensure the promises made are delivered.

Transport for Wales (TfW) – which is advising the Welsh Government on the contract – said the new franchise holder would be held to account on issues like punctuality, cleanliness and service quality or they would not get paid.

But there will be challenges ahead in terms of rising passenger numbers, which have nearly doubled in the last 15 years.

Economy Secretary Ken Skates said: “Throughout the procurement process we have prioritised investment in the quality of trains, stations and services for the Wales and Borders Rail Service and South Wales Metro.

“We are grateful to all those who have participated in the procurement process.”

He said no further comment would be made until the end of the 10-day standstill period.

Andy Milner, Amey’s chief executive, said: “While the proposed changes won’t happen overnight, the railway will be unrecognisable in five years thanks to the vision of the Welsh Government.”

He added they would focus on working with TfW to transform the existing infrastructure and introduce new trains to “significantly improve the passenger experience” as well as creating hundreds of new jobs and apprenticeships.

Alistair Gordon, chief executive of Keolis UK, said it would be a transformative new rail service.

Both politicians and the rail operator alike will hope the system will be the most attractive option for travellers.

TfW will regulate fares and they will not be expected to rise more than inflation.

But new trains might take at least a couple of years to appear.

Councillor Andrew Morgan, chair of the Cardiff Capital Region cabinet, said: “This is a fantastic opportunity to create and deliver a transport infrastructure which supports the aims of the City Deal.”

He said it was “absolutely critical” that a transport service was created which could accommodate and connect passengers in the region “safely, quickly, and in comfort.”

 

 

Posted on

PMEX index closes at 3,500 points

F.P. Report

KARACHI: Pakistan Mercantile Exchange Limited commodity index on Tuesday closed at 3,500; with traded value of metals, energy and COTS/FX recorded at 4.699 billion. The number of lots traded was 10,308, said PMEX release on Wednesday.

Major business was contributed by WTI crude oil amounting to Rs 1.299 billion, followed by gold Rs 1.270 billion, currencies through cost Rs 1.068 billion, platinum Rs 365.329 million, silver Rs 240.598 million, DJ Rs 129.935 million, natural gas Rs 107.175 million, copper Rs 87.152 million, NSDQ100 Rs 82.398 million, Brent Rs 38.254 million and SP500 Rs 10.431 million.

In agriculture, 158lots of cotton amounting to Rs 130.514 million were traded.

 

Posted on

Uber gives drivers sick pay and parental leave

NEW YORK (BBC News): Ride hailing firm Uber will give its European drivers access to medical cover and compensation for work-related injuries.

The new protections include sick pay, parental leave and bereavement payments. Uber said it previously “focused too much on growth and not enough on the people who made that growth possible”.

“We called drivers ‘partners’, but didn’t always act like it,” said Uber’s chief executive Dara Khosrowshahi.

The insurance and compensation package will be available to all Uber drivers and Uber Eats delivery couriers across Europe.

However, unions have questioned whether the package is new.

In April 2017, Uber announced illness and injury insurance cover for its drivers.

Uber drivers who wanted to join the scheme were required to pay £2 a week.

“I’m highly suspicious – is this a revamp, is this another bite of the cherry to make themselves look caring. What’s the story here?” said Steve Garelick, regional organiser for gig economy and transport for GMB union.

James Farrar, the lead claimant in an employment tribunal case against Uber and chair of United Private Hire Drivers (UPHD) branch of the IWGB union, told the BBC: “This is not nearly enough. We have statutory rights under the law. What Uber has given us are cosmetic benefits that can be taken away at any time.”

Uber’s announcement comes before an appeal hearing at Westminster Magistrates Court on 25 June, where a judge will decide whether Transport for London (TfL) should renew Uber’s private hire operating licence in London.

TfL withdrew Uber’s operating licence in September on the grounds of “public safety and security implications”.

Uber has been allowed to continue operating in the city while it appealed against the decision.

Uber will provide drivers with a range of insurance coverage and compensation resulting from accidents or injuries that occur while they are working, as well as protection for “major life events” that happen whether the driver is on a shift or not.

Uber drivers in the UK have been campaigning for better rights for at least three years.

In October 2016, a tribunal ruled that two UK-based Uber drivers should be classed as staff, not self-employed workers, and entitled to holiday pay, paid rest breaks and the minimum wage.

Uber appealed against the decision, arguing its drivers were self-employed and were under no obligation to use its booking app, but in November 2017, the Employment Tribunal upheld its original decision that any Uber driver who had the Uber app switched on was working for the company under a “worker” contract.

Uber continues to appeal against the Employment Tribunal decision and the next appeal hearing will be held on 30 October.

Mr Farrar said that Uber should drop its appeal and recognise trade union representation for drivers, if the ride hailing firm wants to show it really does care about driver welfare.

In the US, Uber drivers continue to fight in court for the right to be classed as workers.

Posted on

Marks and Spencer profits slump on store closure costs

LONDON (BBC News): Marks and Spencer has suffered a big fall in annual profits following a costly store closure plan.

Annual pre-tax profits fell by almost two-thirds to £66.8m as sales of food, clothing and homeware all declined.

On Tuesday the retailer said it plans to close 100 shops by 2022, accelerating an overhaul that it says is “vital” for its future.

The expense of closing stores and revamping the business cost M&S £321m in the 12 months to March.

M&S has already shut 21 stores and revealed the location of 14 further closures on Tuesday.

“This modernisation programme… is to close some of the small stores where we can’t give the full offer, and show customers in our better stores, our bigger stores the full range of what M&S does,” chief executive Steve Rowe told BBC Radio 4’s Today programme.

“It is a catch-up programme, we have to make sure we don’t stop modernising our estate and that we give our customers the stores that they deserve.”

Mr Rowe declined to say how many jobs would be lost as a result of the store closure programme.

“We’re assessing this on a store-by-store basis and are committed to redeploying our colleagues wherever possible,” he said. “In the last round of closures, 86% were redeployed to another store and we want to have continuity.”

M&S has been criticised for failing to revive its clothing range. Mr Rowe said the retailer had made its clothes “more contemporary” and pointed out that, for the first time in seven years, it had gained customers in womenswear.

The company also wants internet sales to account for a third of its business, but it admitted that its online performance was behind its competitors and the website was too slow.

Mr Rowe said: “Our product pages need to download quicker than they are if they are to be the best in class and our search needs to be made easier.

“We are doing those changes to the website now and are continuing to treat this as business as usual. Making the website fit for the future is largely covered in our core operating costs.”

One big problem is the company’s distribution centre in Castle Donington, which handles online orders.

“It is a difficult thing for us at the moment,” Mr Rowe said. “It has failed in its customer proposition and that’s not good enough at a time when customers want more merchandise delivered quicker.”

He said M&S aimed to expand the website to better compete against its rivals.

Neil Wilson, chief market analyst at Markets.com, said M&S needed to quickly revamp online: “You can boost profits with fewer stores only if you can drive online sales growth and, on that front, M&S is well behind.”

Bryan Roberts, retail analyst at TCC global, said: “In clothing we’ve seen green shoots of recovery, but the business still lacks any sense of identity… M&S used to be famous as a destination for certain products, such as good quality school uniforms, but that’s been lost somewhere along the way. A back-to-basics approach should help it reclaim ground lost to stores less beholden to a seasonal structure.”

Last year sales of clothing and homeware slid 1.9% on a like-for-like basis, which strips out the effect of new stores, while like-for-like food sales also declined by 0.3%.

The results were not as bad as some analysts had feared and shares in M&S rose 4.5% in morning trading to 305p.

However, the share price is still down more than a fifth over the past year.

 

 

Posted on

WB approves $600m loan for Salt Lake storage

Monitoring Desk

ISTANBUL: The World Bank approved a $600 million loan for Turkey’s Gas Storage Expansion Project, which aims to support capacity increases at the Salt Lake Natural Gas Storage Facility, the Bank announced Wednesday.

The project’s aim is to increase the reliability and security of gas supplies in Turkey by expanding the underground gas storage facility near the Salt Lake in the Central Anatolia region of Turkey, the statement said.

In November 2005, the Bank approved a $325 million loan for a first gas storage project at Salt Lake, and in July 2014 it approved additional financing of $400 million to provide storage for about one billion cubic meters of gas, the statement showed.

“The Gas Storage Expansion project will support government efforts to quintuple the size of the storage facility at the same location.

Turkey’s national gas company, BOTAS will implement the Gas Storage Expansion Project, which will consist of three components,” the statement read.

The first component involves building an underground gas storage facility within the salt formation close to the Salt Lake to further increase capacity by approx. 4 billion cubic meters, the statement said.

The second component involves the construction, supervision, and monitoring of the environmental and social impact assessment (ESIA) and the resettlement action plans (RAP), the Bank said.

Turkey’s President Recep Tayyip Erdogan announced last February that the storage capacity would increase from 1.2 billion cubic meters to 5.4 billion cubic meters.

The first phase comprises the storage of 1.2 billion cubic meters of natural gas in 12 caverns. Currently, storage works have started at six caverns this year and the remaining caverns will be stored with gas up to 2020.

The number of caverns will rise to 60 when the capacity of the project expands to 5.4 billion cubic meters. Each cavern will hold around 100 million cubic meters.

The expansion is expected for completion by 2023.

Turkey aims to have a storage capacity that will be able to meet at least 20 percent of its gas demand. The Salt Lake facility will have enough capacity to meet almost 10 percent of Turkey’s current natural gas consumption of around 50 billion cubic meters per year.

The statement said, “the project is expected to help Turkey lower its greenhouse gas emissions by reducing dependence on coal, especially in the winter months. Increased flexibility in the natural gas supply will also support greater integration of renewables as they become a larger part of Turkey’s energy mix”.

“Financing the proposed Gas Storage Expansion Project is an integral component of the World Bank’s program of policy, technical and financial assistance in Turkey to support energy reform in general and gas sector reform specifically.

“With this project, the World Bank is also helping Turkey raise financing from other sources, including commercial finance through due diligence on BOTAS’ technical, procurement, and environment and social safeguards work on the project. The Asian Infrastructure Investment Bank is a co-financier of the project,” the World Bank said. The lending for the project is based on an International Bank for Reconstruction and Development (IBRD) flexible loan with 22.5-years maturity, including a seven-year grace period, according to the statement.

Key role in improving energy security

The Salt Lake Underground Gas Storage Facility is the first of its kind in Turkey and one of few such projects globally, Johannes Zutt, the World Bank country director for Turkey was quoted as saying.

“The facility will play a key role in improving Turkey’s energy security and in enabling flexibility in meeting the growing demand for natural gas among households and businesses,” Zutt continued.

“In particular, the facility will help ensure that enough natural gas is available to consumers at all times, especially when global supplies are tight or when demand escalates suddenly due to winter cold,” he concluded. AA

 

Posted on

Salman’s eyes entertainment sector

Monitoring Desk

RIYADH: Saudi Arabia is looking to the entertainment sector with a view to diversifying its economy away from petroleum, which has recently suffered from a decrease in international prices.

Since Mohammad bin Salman was made crown prince last summer, the kingdom has stepped up its search for alternative means of income.

In February, Saudi Arabia hosted its first-ever opera performance and jazz festival under the auspices of the Saudi Entertainment Agency, which was established in 2016. Abdullah Meglus, a member of the Saudi Economic Association, told Anadolu Agency on Wednesday that the recent opening of public cinemas would contribute to the local culture, tourism and finance sectors.

“Public cinemas will aid in the diversification of the economy and help it grow in the long run,” he said.

The country’s first public cinema opened in April. Since then, Saudi officials have said they want to open 40 more movie theaters within the next five years.

Plans to reduce the country’s dependence on oil constitute a major plank of Saudi Arabia’s Vision 2030, a 15-year economic plan unveiled in 2016. On Apr. 29, Saudi officials formally inaugurated the Qiddiya project in western Riyadh, which, when completed in 2022, will be one of the world’s largest entertainment parks. Built on 334 square kilometers of land, the park is expected to be one of the region’s most expansive entertainment complexes. AA

 

 

Posted on

Tesla’s Musk promises to fix braking issue in Model 3

NEW YORK (Reuters): Tesla Chief Executive Officer Elon Musk has sought to play down a report identifying “big flaws” in its Model 3 sedan, admitting there is a braking issue with the vehicle but saying it will be fixed with a software update within days.

Responding to a review by influential US magazine Consumer Reports which stopped short of recommending the car, Musk said in a round of tweets late on Monday that the magazine’s tests – which used two separately-sourced vehicles – had been of older versions of the car that had already been improved upon.

The issue, which ate into gains for Tesla shares on Monday, came at a time when Tesla is dealing with reports of crashes involving its vehicles and growing scepticism over its finances.

Tesla stock, down around $100 dollars since last September, gained around 1 percent on Tuesday, having finished almost 3 percent higher on Monday, helped by an easing of trade tensions with China which may aid its plans to produce there.

“With further refinement, we can improve braking distance beyond initial specs. Tesla won’t stop until Model 3 has better braking than any remotely comparable car,” Musk wrote in exchanges with other twitter users.

“Also Consumer Reports has an early production car. Model 3 now has improved ride comfort, lower wind noise & many other small improvements. Will request that they test current production,” he wrote.

Production of Tesla Model 3s began in July of last year and the first regular customers only received their cars in December after some Tesla employees.

Consumer Reports said in the review on Monday that it had sourced a second privately-owned Model 3 to confirm initial results that showed the sedan braked slower than a full-sized pickup truck. The report did not mention the age of either car used in the testing.

Calling the review “very strange”, Musk also said that the variability in stopping distance was due to an ABS (Anti-Skid Braking System) calibration algorithm.

“The CR braking result is inconsistent with other reviewers, but might indicate that some Model 3s have longer braking distances than others,” he said.

“If so, we will address this at our expense. May just be a question of firmware tuning, in which case can be solved by an OTA software update.”

Analysts said the magazine’s story was a bad advertisement for Tesla.

“While the negative reports of braking issues will not deter Tesla brand enthusiasts, it might raise doubts among the more casual buyer,” said Neil Saunders, Managing Director of consumer research house GlobalData Retail.

“It is important not to be too harsh on Tesla as other vehicles have had their share of safety and technical issues. The issue for Tesla is that unlike other car companies, it is a young brand that needs to win people over so can’t afford too many missteps.”

Posted on

Hong Kong shares decrease over China-US trade uncertainty

Monitoring Desk

HONG KONG: Hong Kong shares retreated early Wednesday, as renewed uncertainty over trade relations between the U.S. and China weighed on risk appetite.

U.S. President Donald Trump on Tuesday said he was not pleased with the trade agreement with China and that the two nations remain in talks, fueling concern that tensions between the two sides have not eased. Trump’s comments came after an announcement by Treasury Secretary Steven Mnuchin on Sunday that a “trade war” between the U.S. and China was on hold for now.

The Hang Seng Index was down 1% to 30,909.01 by the noon lunch break on Wednesday. China Shenhua Energy, a coal miner, dropped 6.8% to lead percentage losses on the index. China’s National Development and Reform Commission has asked utilities to stop stockpiling thermal coal and told miners to cut prices, Reuters reported, citing two sources familiar with the matter. Oil producers CNOOC and China Petroleum & Chemical (Sinopec) shed 2.9% and 2.4%, respectively, as Brent crude futures traded below $80 a barrel. China Unicom (Hong Kong) fell 2%. The mobile operator late Monday said its 4G subscribers rose by 4.06 million last month, a slowdown from an addition of 7.07 million users in March.

COSCO Shipping Holdings lost 3% after a 5.1% rally on Monday. Hong Kong markets were closed on Tuesday for a local holiday.

“The Hong Kong stock market is cooling down this morning after investors discovered the U.S.-China trade deal has not been finalized,” said Linus Yip, chief strategist at First Shanghai Securities, adding that market players are cautious about the “costs China has to pay.”

“Even though some sectors such as shipping saw a relief rally earlier, the benefit of China importing more U.S. goods will not apply sector-wide. Investors need to carefully assess which stock will benefit, and the potential reduction of Chinese exports may weigh on shipping volumes,” he said.

The Shanghai Composite Index was down 0.8% by midday on Wednesday, while its Shenzhen counterpart had shed 0.5%.

Trump also proposed a plan to penalize ZTE and change its management, as he seeks to keep the Chinese telecommunications equipment maker in business after the U.S. Department of Commerce earlier banned American enterprises from selling to the company.

Separately, Reuters cited U.S. lawmakers as saying will try to prevent Trump from easing penalties on ZTE.

Trading in ZTE’s Shenzhen- and Hong Kong-listed shares remains halted.

WuXi Biologics rose 2.7% in Hong Kong after saying it plans to set up a new clinical and commercial manufacturing facility for biologics in Singapore for 80 million Singapore dollars ($59.7 million).

Sino Harbour Holdings Group tumbled 3.4% after saying it expects a significant decline in its profit for the year ended March 31.

Online gaming and internet services company Kingsoft fell 2.6% after reporting a 50% decline in net profit for the January-March quarter. Revenue for the period rose 4% to 1.26 billion yuan ($197.7 million).

Mining company CST Group climbed 2.8% after saying a unit agreed to sell 3.82 billion shares in mining-focused investment company G-Resources Group to PX Capital Management for 267.5 million Hong Kong dollars ($34.1 million). Shares of G-Resources jumped 16.7%.

Posted on

China to assist Pakistan to overcome the foreign currency crisis, says Tariq Bajwa

Monitoring Desk

LAHORE: State Bank of Pakistan governor Tariq Bajwa has confirmed that China has been assisting Pakistan to stave off the foreign currency crisis.

In an interview to the Financial Times, Tariq Bajwa said $1 billion financing had been obtained from Chinese banks in April to help avoid a foreign currency crisis and were at “good, competitive rates.”

The country’s foreign exchange reserves have been sliding since reaching a high in October 2016 and stood at $10.8 billion on May 11th.

Chinese-backed loans are expected to bolster the falling finances of Pakistan and expected to further cement the financial, political and military ties between the two countries, said FT.

Pakistan obtained $1.5 billion from China during the first ten months of the current financial year 2018-19.

Documents revealed that China has given $334 million in loans for the Orange line Lahore project, $691 million for Sukkur Multan, $273 million for Havelian Thakor and $88 million in the recently inaugurated Neelum Jhelum Hydropower project.

According to officials in Islamabad, China was fine with giving loans to Pakistan despite the financial crunch but doesn’t want details of the loan to be made public.

In a statement to Financial Times, one civil servant said “The Chinese are not keen on western institutions learning the minute details of [financing of] CPEC projects. An IMF programme will require Pakistan to disclose the financial terms to its officials.”

As per a report in The News, in the wake of rising current account deficit that swelled to $14.035 billion in the first 10 months and resulting into slashing down of foreign currency reserves with every passing week, Pakistan was looking towards China as the last available option with expectations of receiving $01 to $02 billion on account of safe deposits before June 30, 2018.

One top official of the Finance Ministry confirmed to The News on Friday that Pakistan did not make any formal request to China for keeping dollars in the shape of safe deposits into the State Bank of Pakistan (SBP), but Beijing had conveyed through informal channels that they might sanction putting $01 to $02 billion for keeping into Pakistan’s central bank in a bid to jack up the dwindling foreign currency reserves.

Currently, China’s $500 million is lying in a safe deposit with the SBP.

Pakistan had returned safe Chinese deposit to Beijing when the country’s reserves had reached comfortable position after graduating the IMF programme successfully during the tenure of former finance minister Ishaq Dar in September 2016.