Beijing: China has again rushed to bail out Pakistan by providing USD 2.5 billion in assistance to prop up the fast-depleting foreign exchange reserves of its cash-strapped all-weather ally, months after it rolled over a USD 4.5 billion loan due to be paid this year.
The announcement of the Chinese assistance came after France signed an agreement with Pakistan to suspend its loan worth USD 107 million under the G20 Debt Service Suspension Initiative (DSSI).
The agreement was signed by Ministry of Economic Affairs Secretary Mian Asad Hayaud Din and French Ambassador Nicolas Galey, the Economic Affairs Division of Pakistan said in a statement on Monday.
“China and Pakistan are all-weather strategic cooperative partners. China always supports Pakistan in growing its economy, improving livelihoods and upholding financial stability, Chinese Foreign Ministry spokesman Zhao Lijian told a media briefing here while replying to a question about China providing RMB 15 billion (USD 2.3 billion) to Pakistan to build its depleting foreign exchange reserves.
Pakistan media quoted Prime Minister Shehbaz Sharif as saying that Pakistan is hopeful of getting USD 2 billion from the IMF.
China’s latest assistance is in addition to Beijing rolling over USD 4.5 billion debt due to be paid by Islamabad in March this year and USD 2.5 billion given in 2019 to boost the sagging foreign exchange reserves of Pakistan.
Pakistan is the second country in the sub-continent after Sri Lanka to face a serious economic crisis notwithstanding massive Chinese investments and loans.
China had skirted desperate pleas from Sri Lankan leaders before the country went bankrupt defaulting on all its foreign debt totalling USD 51 billion.
The new Chinese assistance to Pakistan followed the visit of Pakistan Army Chief General Qamar Javed Bajwa this month during which the two countries agreed to step up defence and anti-terrorism cooperation.
Last month Pakistan’s Foreign Minister Bilawal Bhutto made his maiden visit to Beijing and held talks with Chinese counterpart Wang Yi.
Cash-starved Pakistan has faced growing economic challenges, with high inflation, sliding forex reserves, a widening current account deficit and a depreciating currency.
Chinese banks have agreed to refinance Pakistan with USD 2.3 billion worth of funds in a massive relief for the cash-starved country to help it bolster its depleting foreign exchange reserves, Pakistan Finance Minister Miftah Ismail said early this month.
Pakistan is facing an uncertain economic situation due to a delay in the revival of a stalled multibillion-dollar International Monetary Fund (IMF) programme.
Saudi Arabia has agreed to provide Pakistan with a “sizeable package” of around USD 8 billion to help the country revive its ailing economy. Saudi Arabia provided USD 3 billion deposits to the State Bank of Pakistan in December 2021 while the Saudi oil facility was operationalised from March 2022, providing Islamabad with USD 100 million to procure oil.
Saudi Arabia provided USD 3 billion deposits to the State Bank of Pakistan in December 2021 while the Saudi oil facility was operationalised from March 2022, providing Pakistan with USD 100 million to procure oil.