Pakistan’s indebtedness towards the Chinese sees no diminishing as the country again borrowed $1b to pay back for a Eurobond debt of $750m on Thursday. This Eurobond was issued during the Musharraf era at 6.875pc interest rate for 10 years.
The total amount of borrowing from Chinese banks in the last nine months has reached $2b, including the $1b to payback this Eurobond debt which was borrowed from China Development Bank. The interest rates for these loans range from 4.22pc to 4.44pc. These loan facilities being availed by the government to retire earlier debts, only worsens the position of Pakistan’s external debt instead of alleviating it.
According to a SBP announcement on Thursday, the total liquid foreign reserves held by the country stood at US$ 21,770.4m on May 26 2017. It pointed out that the break-up of the foreign reserves position is as follows:
- Foreign reserves held by the State Bank of Pakistan: $ 16,921.9m
- Net foreign reserves held by commercial banks: $ 4,848.5m
- Total liquid foreign reserves: US$ 21,770.4m
During the week ending May 26 2017, SBP’s reserves increased by US$ 709 million to US$16,922 million, due to official inflows, it was further pointed out. This uplift in forex reserves was helped by the injection of the $1b loan from China Development Bank, which was availed to make the payment for $750m Eurobond debt.