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China Comes to Pakistan’s Rescue with $2.5b Loan

ISLAMABAD – China to provide $2.5 billion in loans to Pakistan to boost official foreign exchange reserves that are not sufficient to provide cover to even two months of imports despite receiving $4 billion loans from two Middle Eastern countries, Pakistani media reported Saturday.
“Beijing will place the $2.5 billion in deposits with the central bank of Pakistan,” a top government official told The Express Tribune.
With the predicted $2.5 billion deposits, China’s contribution in this fiscal year alone would surge to $4.5 billion.
In July 2018, China had also deposited $2 billion with the State Bank of Pakistan.
The money is coming as part of the Pakistan government’s strategy to secure breathing space till the time its macroeconomic stabilization measures take effect.
After coming into power, Pakistani Prime minister, Imran Khan, had visited China, Saudi Arabia and the United Arab Emirates (UAE) to arrange emergency loans to avoid a looming default.
Resultantly, Pakistan has secured $14.5 billion worth of commitments that have helped largely bridged the external financing gap of the ongoing fiscal year.
(Sahar News Monitoring Desk)

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