Pakistan seeks $600 million in loans from Chinese banks
Pakistan is currently engaged in advanced negotiations with
two Chinese banks, the Industrial and Commercial Bank of China (ICBC) and the
Bank of China, with the aim of securing $600 million in new loans. These
negotiations are intended to address a financing gap and enhance the country's
credit rating.
According to Express Tribune, each of these Chinese banks
has been approached for a financing package of $300 million.
Pakistan
gets $1 billion Chinese loan
The negotiations are reported to be at an advanced stage,
and officials from Pakistan's finance ministry anticipate that the loans will
be disbursed by December.
Sources have revealed that China and Pakistan are working
closely to finalize the remaining technical procedures necessary for the $600
million loan. However, it is expected that the interest rates on these new
commercial facilities may be somewhat higher due to the current global interest
rate scenario.
It is not confirmed whether Pakistan has sought another loan
from the State Administration of Foreign Exchange (SAFE) of China. SAFE has
previously extended $4 billion in loans to Pakistan, which are rescheduled
annually due to Pakistan's financial challenges in repaying them.
Chinese
Bank approves $700m loan for Pakistan
With a budget allocation of $4.5 billion for foreign
commercial loans, securing financing has been a challenge for Pakistan due to
its poor credit ratings, high debt sustainability risks, and a fragile
macroeconomic situation. Consequently, Pakistan has increasingly turned to
China for emergency financing in recent years.
China's support has taken various forms, including loans
from SAFE deposits, concessionary loans, and commercial loans, all aimed at
helping Pakistan stabilize its external sector.
In June of this year, China aided Pakistan in preventing a
further decline in its critically low foreign currency reserves by facilitating
the early adjustment of a $1.3 billion repayment.
This development underscores Pakistan's ongoing efforts to
secure financing and improve its financial stability, with China playing a key
role in these endeavors.
Source: Express Tribune