On Friday, Pakistan’s Finance Minister Ishaq Dar announced that the Industrial and Commercial Bank of China (ICBC) has approved a facility of $1.3 billion, of which the first installment of $500 million has been received by the State Bank of Pakistan. The facility is expected to be disbursed in three installments and will help increase Pakistan’s foreign exchange reserves.
The country has been facing economic challenges due to high inflation, a widening current account deficit, depreciating currency, and sliding forex reserves. As of February 24, foreign exchange reserves were at $3.8 billion, which is just enough for less than a month of imports.
The finance minister also announced that China has renewed a facility under which Pakistan expects an additional inflow of $500 million in the next few days. The government returned $6.5 billion of foreign debt during the current fiscal year, and formalities with ICBC were completed to renew the facility.
