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"This will strengthen Pakistan's foreign exchange reserves," Ishaq Dar said
Finance and Revenue Senator Ishaq Dar on Friday received $500 million from Bank of China as part of a $1.3 billion refinancing deal as the country faces its worst economic crisis.
The second major payment was made by the Industrial and Commercial Bank of China (ICBC) after Pakistan completed the required documents.
Pakistan's finance minister tweeted: "State Bank of Pakistan today received $500 million from China's ICBC bank account increasing Pakistan's foreign exchange reserves. Alhamdulillah!"
Earlier this month, Chinese lenders approved a $1.3 billion loan to Pakistan.
Following the announcement, China's central bank deposited $500 million on March 4, bringing its foreign exchange reserves to more than $4 billion.
This country is facing increasing economic challenges due to lack of liquidity, including high inflation, cash reserves, increasing current account deficit, and devaluation of the currency.
Dahl, who took over as finance minister last September, said Pakistan had disbursed about $5.5 billion (not including $1 billion in sukuk). This includes $2 billion to China Development Bank and ICBC and $3.5 billion to banks in other countries.
Debts increase, but the amount of debt does not decrease.
We will get the same back. Pakistan will receive $500 million in two to three days. It may be on Monday. do, and then we'll get it. Take 10, another $500 million."
Foreign exchange reserves reached $4.3 billion as of March 10, which is enough for less than a month's worth of imports. Liquid foreign exchange reserves are approximately $9.8 billion, including $5.5 billion in net reserves of commercial banks.
China's central bank pledged to repay another $500 million in the next few days, bringing total commercial loans to $1.7 billion from $2 billion, according to news reports.
Pakistani officials are moving pillar by pillar to get 100 percent approval from friendly donors and multilateral lenders before signing a staff-level agreement with the International Monetary Fund (IMF).
The HPG's unwritten condition is that Pakistan must ensure the refinancing of commercial loans and investment flows from China during the program period ending June 2023.
Chinese banks have funded $1.2 billion of their commercial debt over the past few weeks, and Beijing has now pledged to fund another $500 million over the next few days.
It should also be noted that this month, Pakistan demanded the return of China's $2 billion deposit in Aman.
All these are prerequisites for the signing of staff level agreements between HPG and the Pakistani side for the refinancing of the commercial loan and the repayment of the AMAN deposit.
Pakistani authorities are currently awaiting approvals from the Kingdom of Saudi Arabia, the United Arab Emirates, Qatar, the World Bank and the AIIB to meet their $6 billion external financing needs by the end of June 2023.
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