In a situation of drying up funds, the Chinese Development Bank (CDB) has become the first drop of rain in providing respite. In a tweet, the finance minister, Ishaq Dar, mentioned that formalities had been completed and the board of the CDB had approved a facility of $700 million for Pakistan. The money will be received by the State Bank of Pakistan within the week and the money will help shore up the country’s ever so shrinking reserves.
Chinese Development Bank, is a state owned and a state funded institution, that is overseen, directly by the State Council. The terms of the loan have not been made public. However, being a state-enterprise of the Chinese government, the financing facility is likely to be under the same terms as other CPEC loans.
A top government official reportedly told media sources that the government was hopeful about the refinancing of already matured loans of Chinese commercial banks too.
Pakistan obtained an approximately $6.3 billion rollover from the Chinese government and commercial banks in the last quarter, a considerable portion of which is owed to Chinese commercial banks. The majority of these loans mature in March 2023.
According to media reports, Pakistan is looking to obtain a refinancing of approximately $2 billion worth of loans, by the first week of March.
As Pakistan closes in on the prior conditions set by the IMF, it is now out to scout for additional external financing sources. Despite the promised bilateral loans from friendly countries, that are contingent upon the IMF tranche, Pakistan will need more financing to close in on the requisite figure of $16 billion, set by the IMF.
As of now, the country has spiked up its fiscal revenue targets, as asked by the IMF. This has been done by raising fuel and power prices and additional tax measures introduced through the Finance (Supplementary) Bill 2023. Talking to the standing committee on Finance and Revenue, the State Minister Aisha Ghaus Pasha, said that Pakistan had made considerable progress over virtual negotiations with the Washington based lender and the Staff Level Agreement will soon be signed.