Chinese banks agree to provide $2.3bn loan: Miftah Ismail

ISLAMABAD: Minister for Finance and Revenue Miftah Ismail on Wednesday said that the Chinese consortium of banks has signed the $2.3 billion (15 billion renminbi) loan facility agreement.

In his tweet, the finance minister said the inflow was expected within a couple of days. He thanked the Chinese government for facilitating the transaction without providing any further details.

Foreign Minister Bilawal Bhutto Zardari also expressed his gratitude to the Chinese leadership. “The people of Pakistan are grateful for the continued support of our all-weather friends,” he said.

The Chinese consortium of banks has today signed the RMB 15 billion (~$2.3 billion) loan facility agreement after it was signed by the Pakistani side yesterday. Inflow is expected within a couple of days. We thank the Chinese government for facilitating this transaction.

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— Miftah Ismail (@MiftahIsmail) June 22, 2022

The development comes after that Pakistan and the IMF reached an understanding on all budget related, paving the way for the revival of the bailout programme by the end of the week.

The understanding was reached during a meeting, held via video link, between the Pakistani economic team led by Finance Minister Miftah Ismail and the IMF staff mission.

READ MORE: IMF programme to be revived within days: Miftah Ismail

Earlier this month, the finance minister had announced that the terms and conditions for refinancing the deposit by Chinese banks had been agreed.

He had said the loan would help “shore up our foreign exchange reserves”. China had withdrawn the loan on March 25 and set tough conditions under which Pakistan could not utilize those funds.

Miftah said the visit by Foreign Minister Bilawal Bhutto Zardari and follow-up discussions by Prime Minister Shehbaz Sharif with Prime Minister Li Keqiang helped lift the restrictions.

The Chinese side agreed to roll over the amount but also done so at a cheaper interest rate of 1.5pc plus Shanghai Interbank Offered Rate (Shibor) instead of earlier 2.5pc plus Shibor.