Islamabad, Oct 27: Pakistan Officially Requests Additional ¥10 Billion Loan from China. In order to alleviate its external funding requirements, Pakistan has asked China for another loan of CN ¥10 billion ($1.4 billion).
During the IMF/WB annual meetings in Washington, China’s Vice Minister of Finance Liao Min heard this plea from Finance Minister Muhammad Aurangzeb. He wanted the current Currency Swap Agreement (CSA) to be increased to ¥40 billion.
Pakistan is requesting this increased ceiling in order to fortify its reserves after having already used the existing ¥30 billion ($4.3 billion) capacity to settle debt obligations. The facility would cost about $5.7 billion if it were permitted. Beijing has, however, turned down such demands in the past.
The State Bank of Pakistan and the People’s Bank of China initially signed the CSA in 2011 with the intention of assisting with trade, investment, and liquidity requirements between the two nations. It has only been utilized to boost Pakistan’s foreign reserves and was first capped at ¥20 billion before increasing to ¥30 billion in 2021.
Aurangzeb acknowledged Pakistan’s desire to learn from China’s economic changes and conveyed gratitude for China’s assistance, particularly in obtaining IMF funds. He also reaffirmed security guarantees for Chinese workers in Pakistan and revealed plans to issue the first Panda bond.
