Tuesday, July 5, 2022

Cash-Strapped Pakistan To Get 2.3 Billion Dollar From China Under Loan Agreement

Pakistan In Financial Crisis: The economic condition of Pakistan is continuously deteriorating. Cash-strapped Pakistan has been compelled to agree on a loan agreement with the International Monetary Fund to deal with this situation. The result was that under the loan agreement, he would be able to get a loan of $ 2.3 billion from China. This information has come to the fore by quoting a media outlet of Pakistan. To deal with the country’s dwindling cash reserves, Pakistan is expected to get a loan of US $ 2.3 billion from the Chinese consortium of banks in a few days.

Pakistan-China loan agreement has already been signed

According to a report in Pakistan’s newspaper Dawn, in particular, China’s consortium of banks and Pakistan had already signed a loan facility agreement of $ 2.3 billion. The latest information about this agreement has come on Wednesday, June 22, quoting Pakistan’s Finance Minister Miftah Ismail. He said that the cash under this loan agreement is expected to reach Pakistan in a few days. On his Twitter account, Pakistan’s Finance Minister Miftah Ismail wrote, “The Chinese consortium of banks today signed the People’s Republic of China (RMB) RMB 15 billion i.e. $ 2.3 billion loan after being signed by the Pakistani side yesterday. The facilitation agreement has been signed. This cash inflow is expected within a few days. We thank the Chinese government for facilitating this transaction.

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Pakistan’s Finance Minister Ismail said that after the visit of Foreign Minister Bilawal Bhutto-Zardari and follow-up discussions of Prime Minister Shehbaz Sharif with Chinese Prime Minister Li Keqiang, the Chinese side not only Officially agreed to give this cash, but gave this loan at a cheaper rate of interest. Earlier Shanghai Interbank offered 2.5 pc plus Shibor interest rate, but now it has been reduced to 1.5 pc plus. However, in Wednesday’s announcement, Ismail did not elaborate on the agreement reached with the consortium.

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What did the Foreign Minister of Pakistan say?

Regarding this loan agreement, Pakistan’s Foreign Minister Bilawal Bhutto also wrote on social media, “I am grateful to President Xi Jinping, Foreign Minister Wang Yi and the people of China. The Chinese Federation has today signed a RMB 15 billion loan facility agreement, grateful to the people of Pakistan for our continued support and support in all times of good and bad.

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Pakistan’s economic future with China

According to the Pakistani newspaper Dawn, Pakistan is facing a serious financial crisis and this new thing in this matter has come to the fore after the report of Pakistan reaching an agreement with the International Monetary Fund (IMF). And this loan agreement between Pakistan has also come amidst reports that Pakistan is blindly following the path of Sri Lanka, due to which the country will be caught in the trap of Chinese debt. The Italian publication Osservatorio Globalizzazione has written that Pakistan’s already fragile and stifling economy suffered another setback when China recently committed 55.6 million US dollars for the Lahore Orange Line Project by November 2023. Dollar demanded refund. Meanwhile, at the end of March, the State Bank of Pakistan’s foreign exchange reserves fell sharply by USD 2.915 billion due to repayment of foreign debt. Overall, if we look at the situation, then as far as the relations between China and Pakistan are concerned, the economic future of Pakistan with China is bleak.

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