Industrial and Commercial Bank of China Ltd on Friday approved a rollover of a $1.3 billion loan for cash-strapped Pakistan, which will help shore up its depleting foreign exchange reserves, Finance Minister Ishaq Dar said.
The facility will be disbursed in three instalments. The first one of $500 million has been received by Pakistan’s central bank, Dar said in a tweet. “It will increase forex reserves,” he said.
The money, which Dar said has been repaid by Pakistan to the ICBC in recent months, is crucial for the South Asian economy, which is facing a balance of payment crisis, with its central bank foreign exchange reserves dropping to levels barely able to cover three weeks of imports.
Pakistan has already received a $700 million loan from China to help boost its forex reserves.
Dar said the total $2 billion is in effect Pakistan borrowing back the debt repayments it has paid to Beijing for previously agreed loans.