- Pakistan is expected to get $3 billion from China and $2 billion from Russia and Kazakhstan, the sources say.
- The Ministry of Finance is finalizing the loan plan as the country makes desperate efforts to stabilize foreign exchange reserves.
- An agreement in this regard will likely be signed with China during Prime Minister Imran Khan’s visit to Beijing next month, sources say..
ISLAMABAD: As the country makes desperate efforts to stabilize foreign exchange reserves, the federal government decided on Monday to take out $5 billion in loans from China, Russia and Kazakhstan, The news reported.
According to sources, Pakistan is expected to get $3 billion from China and $2 billion from Russia and Kazakhstan.
The Finance Ministry has finalized the loan plan and an agreement in this regard will likely be signed with China during Prime Minister Imran Khan’s visit to Beijing next month.
Islamabad plans to spend $2 billion on the ML-1 railway project while $3 billion from China will be used to bolster dwindling foreign exchange reserves.
Initially, the Finance Ministry sources added, the loan agreement with China will be signed for a period of one year.
The development came amid strenuous efforts by Islamabad to relaunch the International Monetary Fund’s $6 billion lending program as all prerequisites were met in this regard ahead of the Board meeting scheduled for 02 February.
Meanwhile, the Ministry of Economic Affairs issued a rebuttal, saying no such proposal was being processed.
According to a previous report published in The news, Pakistan’s gross financing needs are estimated at $30 billion in the upcoming budget for 2022-23, leaving the government no choice but to seek a new loan from the International Monetary Fund (IMF) after the expiry of the existing program in September 2022.
Leading official sources had confirmed The news that if all goes well and Islamabad succeeds in reviving the stalled existing IMF program worth $6 billion under the Extended Financing Facility (EFF) after the completion of the sixth review, then two more reviews, the seventh and eighth, are expected to be completed through September 2022 to qualify to complete the 39-month FEP program.
Despite the national security policy recently approved by the federal cabinet, which advises refraining from obtaining loans from the IMF and other multilateral creditors, Islamabad, in reality, will have no choice but to obtain a lending from the Breton Woods Institutions (BWI) in the wake of gaping gross financing needs.
— Thumbnail: Department of Finance website