Pakistan has received $500mn from ICBC after ICBC approved a 1.3Bn Dollars Rollover

Friday- Industrial and Commercial Bank Ltd Public State-owned Chinese Company has approved a US 1.3Bn rollover, which the State Bank of Pakistan will receive in a total of three installments. A total of $500 Million has been received by SBP.

Dollar photo taken from social media
Federal Minister for Finance and Revenue Ishaq Dar confirmed on Friday that Pakistan has received $500 million in rollovers from ICBC ltd to prevent further depletion of foreign exchange reserves of the country.

 

According to Dar, Pakistan is effectively borrowing back the $2 billion it has paid to China in debt repayments for recently approved loans.

The finance minister announced on Twitter that the formalities have been completed, and the Chinese bank ICBC has approved the rollover of a $1.3 billion facility, which Pakistan has repaid to ICBC in recent months.

He said that the facility would be received in three installments, first, one of $500 million has been received by the State Bank of Pakistan.

taken from Ishaq Dar's Twitter account

"It will increase forex reserves!" Dar commented. Pakistan needs $5Bn foreign financing to tie up its financing gap this fiscal year, which ends in June. More external financing will be coming to Pakistan only after Islamabad signs a deal with the International Monetary Fund (IMF), which the minister said should be received by next weeks.


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The money is essential for Pakistan's economy, which is experiencing a balance of payments crisis as Pakistan's foreign exchange reserves were at $3.8 billion as of February 24, just enough for less than a month of imports.  

At about $9 billion, the nation's liquid foreign currency reserves comprise $5.5 billion in net cash held by commercial banks.

The economic accomplishments of the PDM-led administration:

According to Dar, the SBP's foreign exchange reserves increased from $2.8 billion last month to $3.8 billion this month. He claimed that during the current fiscal year, the government paid back $6.5 billion in foreign debt.

Apart from the $1 billion sukuk payment, Pakistan has paid out about $5.5 billion. The finance minister stated that a total of $3.5 billion had been disbursed to banks in other countries, and $2 billion had been provided to the China Development Bank and ICBC. “Debt is usually rolled over but the debt stock does not reduce. We are reducing debt stock,” he said. “Formalities with ICBC were completed last night.

“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.”