ISLAMABAD: Chinese bank  assured Pakistan it will provide another refinanced $ 500 million loan within next few days, bringing total of commercial loans up to $ 1.7 billion out of total committed amount of $ 2 billion. Pakistani authorities are running from pillar to post to get 100 percent confirmation from friendly donor countries and multilateral creditors before moving toward striking staff-level agreement with International Monetary Fund (IMF).

It was unwritten condition of IMF that Pakistan must secure refinancing of commercial loans as well as rollover on deposits from China during the programme period, which is scheduled to expire in June 2023. “Another $ 500 million commercial loan is coming from Chinese bank,” top official of Finance Division confirmed and added that it would be done soon.

Chinese banks have already provided re-financing of $ 1.2 billion in commercial loans in past few weeks, and now Beijing has given an assurance on another $ 500 million in loan re-financing in next few days.

It is relevant to mention that Pakistan had also requested to grant rollover on Chinese SAFE deposit of $ 2 billion within ongoing month.

All these refinancing of commercial loans and rollovers on SAFE deposits are pre-requisite for moving towards signing of staff-level agreement between IMF and Pakistani side.

Now, Pakistani authorities are anxiously waiting for confirmation from Saudi Arabia, UAE and Qatar as well as from World Bank and Asian Infrastructure Investment Bank for fulfilling external financing needs of $ 6 billion until end of June 2023.

It will be quite difficult for IMF staff to defend 50 percent reduction in foreign exchange reserves held by SBP when there have been no shocks to economy of Pakistan on external front.

But Pakistani authorities argued that flash floods had struck many parts of Pakistan, causing $ 30 billion in losses to economy.

Meanwhile, IMF secretly launched “Inclusive growth in MENA region” here at NUST in which presentations made by IMF high-ups who argued that wherever state-owned enterprises (SOEs) possessed major footprint, it resulted in crowding out of private sector.

Pakistan’s budget makers also assured IMF that they would be preparing gender-based budgeting in next financial year.

To fulfil IMF’s demands, CPI-based and SPI-based inflations have gone up to unprecedented levels of 31.5 percent every month, 42.3 percent every week.

Published in The Daily National Courier, March, 17 2023

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