China deposits another $500m to Pakistan

ISLAMABAD (Agencies): Pakistan on Friday received $500 million — the second disbursement of the $1.3 billion facility — from the Industrial and Commercial Bank of China (ICBC). Federal Minister for Finance and Revenue Senator Ishaq Dar announced the development on his Twitter handle.
He wrote: “State Bank of Pakistan has received on Friday in its account from Chinese Bank ICBC $500 million. It will shore up the forex reserves of Pakistan. AlhamdoLilah!” The second critical disbursement from the Chinese bank came after Pakistan completed the necessary documentation. Earlier this month, the Chinese lender had approved a rollover of a $1.3 billion loan for Pakistan. Following the announcement, the Chinese bank deposited $500 million — the first disbursement — on March 4 which helped the foreign exchange reserves surpass the $4 billion mark.
The cash-strapped country has faced growing economic challenges, with high inflation, sliding forex reserves, a widening current account deficit and a depreciating currency. Earlier, Dar — who took charge of the finance ministry in September last year — said that Pakistan has made payments of around $5.5 billion (excluding the $1 billion sukuk payment). These include $2 billion to China Development Bank and ICBC and $3.5 billion have been given to banks in other countries. “Debt is usually rolled over but the debt stock does not reduce. We are reducing debt stock,” he had said. “Formalities with ICBC were completed last night. We returned $1.3 billion to it and this facility has been renewed and we will receive the amount back in three tranches.”
“We paid back $1.3 billion in three tranches — $500 million, $500 million and $300 million. We will receive it back the same way. Pakistan will get $500 million in two-three days. We might receive it on Monday. Then we will get an additional $500 million in 10 days.” Foreign exchange reserves were at $4.3 billion as of March 10, just enough for less than a month of imports.