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Pakistan gets $2.2 billion commercial loan from China

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Christian Fernsby | Tuesday March 26, 2019 8:41AM ET
Pakistan central bank
Asia   Pakistan central bank

Pakistan on Monday received $2.2 billion in commercial loans from China to shore up its foreign currency reserves and also to meet debt repayments in the coming months, central bank said.


“The State Bank of Pakistan has received RMB 15 billion value today equivalent to $2.2 billion as proceeds of the loan obtained by the government of Pakistan from China,” the State bank of Pakistan (SBP) said.

Khaqan Hassan Najeeb, finance ministry spokesman, said deposit of 15 billion renminbi (Chinese yuan) had “received in SBP account on March 25 from China”.

The spokesman said foreign currency reserves have reached to “comfortable levels” after “successful GoP (government of Pakistan) multipronged strategy to ensure stability in BoP (balance of payment) including curtailing C/A (current account) deficit, improving remittances and ensuring adequate foreign currency financing”.

“As of today FX reserves held by SBP have hit a double digit mark of $10.67 billion,” he added. The inflows from China have increased the country’s foreign currency reserves to $17.909 billion.

The interest rate for the $2.2 billion loan is around 5.5 percent and it’s a sovereign loan and does not require any collateral.

 

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