Friday, 3 December 2021

China agrees to give $2 billion loan to Pakistan

FILE PHOTO: Bundles of banknotes of U.S. Dollar are pictured at a currency exchange shop in Ciudad Juarez, Mexico, January 15, 2018. REUTERS/Jose Luis Gonzalez/File Photo

REUTERS/Jose Luis Gonzalez/File Photo

BEIJING:In a major development, China has agreed to immediately give a $2 billion loan to Pakistan, a move meant to arrest the sliding official foreign currency reserves and provide much-needed breathing space to the new government.

The $2 billion loan will be categorised as an “official bilateral inflow”, said sources in the Ministry of Finance and the State Bank of Pakistan (SBP). They said that over $1 billion has already been transferred to the SBP accounts this week, and would reflect in the reserves’ data to be released on August 2. The amount will push SBP-held foreign currency reserves past $10 billion.

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