ISLAMABAD: The Industrial and Commercial Bank of China (ICBC) is set to give Pakistan $300 million today in a move that will boost the country’s foreign exchange reserves, Finance and Revenue Minister Ishaq Dar said on Friday.
He wrote on Twitter that ICBC had approved a loan facility of $1.3 billion for Pakistan, which had earlier been repaid. The Chinese bank has already returned part of the amount in two previous disbursements.
“State Bank of Pakistan would receive back third and last disbursement today in its account amounting to $300 million,” the finance czar wrote on his official Twitter handle. “It will shore up forex reserves of Pakistan.”
The third critical disbursement from the ICBC will be released after Pakistan completes the necessary documentation.
Last month, the Chinese lender 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 and then the second tranche of an equivalent amount was released on March 17.
The cash-strapped nation of 220 million people is going through one of its biggest economic crises ever as multiple delays in its loan program created a dollar shortage, and import restrictions and reduced foreign-exchange reserves to less than one month of imports.
The nation’s foreign exchange reserves stand at $4 billion while it needs to pay $2.2 billion in the quarter ending June. It expects to roll over a debt of $2.3 billion, according to State Bank of Pakistan Governor Jameel Ahmad.
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 done by next week.
The lender has been negotiating the deal with Pakistan since end-January to clear its ninth review, which if approved by its board will issue over $1 billion tranche of the $6.5 billion bailout agreed upon in 2019.
