China Extends $1 Billion Lifeline to Cash-Strapped Pakistan
Islamabad, Pakistan: In a bid to alleviate its critical foreign reserves shortage amid uncertainty surrounding a stalled International Monetary Fund (IMF) loan, Pakistan has received $1 billion from its ally China. The State Bank of Pakistan (SBP) confirmed the receipt of the funds on Friday night, although no further details were disclosed. This injection of funds will bolster Pakistan's reserves, which had dwindled to approximately $3.9 billion in recent weeks.
Earlier, Finance Minister Ishaq Dar had announced that Pakistan had repaid $1 billion to China on Monday, settling a significant portion of a due amount of $1.3 billion. Pakistan remains hopeful that the remaining amount will be returned.
Pakistan's economy teeters on the brink of default as the IMF pushes the country to fulfill demands, despite Pakistan's assertion that these requirements have already been met. Islamabad had agreed to a $6.5 billion bailout package in 2019, of which $2.5 billion remains outstanding.
While it is unlikely that the entire amount will be disbursed as the program concludes on June 30, Pakistan is urging for a symbolic gesture of endorsement by the Washington-based fund in the form of a $1.1 billion tranche, showcasing its commitment to implementing recommended policies.