– seeks $2-bn more from China and $500-mn from ADB After the United Arab Emirates ‘polite refusal’ to grant over $3 billion oil on deferred payment, Pakistan has geared up efforts to secure another $2 billion deposits from China with the possibility of finalisation of arrangement this month.
Pakistan has also requested the Asian Development Bank (ADB) to approve a $500 million loan in budgetary support before June this year, as it faces difficulties in retaining foreign exchange reserves because of mounting external financing needs.
Pakistan will have to make heavy repayments on foreign loans and bonds in remaining months of the current fiscal year so dollar inflows are must to jack up foreign currency reserves held by the SBP.
Pakistan’s gross official foreign currency reserves stood at only $8.1 billion despite availing $6 billion from China, UAE and Saudi Arabia in past eight months.
The government has managed to compress imports and ensured double-digit growth in remittances but the measures are still not enough to meet its gross external financing requirements for this fiscal year.
Lately, the UAE also cancelled $3.2 billion oil facility on deferred payments, which affected the government’s plans for this as well as the next two fiscal years. There are also delays in disbursements of commercial loans while the exports have also not yet started picking up.
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