ISLAMABAD: Sources from Pakistan’s Finance Ministry claim that the country has received $1 billion from China to boost the South Asian country's crashing foreign currency reserves. The claim comes at a time when speculation of another International Monetary Fund (IMF) bailout does the rounds. The latest loan highlights Islamabad’s growing dependence on Chinese loans to buffer its foreign currency reserves, that plunged to $9.66 billion last week from $16.4 billion in May 2017. The sources said the lending is the outcome of negotiations for loans worth $1-$2 billion that was first reported in late May.
A source said, “Yes, it is with us,” in reference to the money. “The matter stands complete” another added. China's lending to Pak in this fiscal year ending June is set to breach $5 billion with the latest loan. It lent $1.5 billion in the first 10 months of the fiscal year in bilateral loans, according to a finance ministry document. During this period, Pakistan also received $2.9 billion in commercial bank loans mostly from Chinese banks. Beijing looks to prop up Pakistan’s economy follow a strengthening of ties in the wake of China's pledge to fund badly-needed power and road infrastructure as part of the $57 billion China-Pakistan Economic Corridor (CPEC), an important cog in Beijing's vast Belt and Road initiative.
However, analysts say China's help will not be enough and predict that after the July 25 national election the new administration will likely seek Pak's second bailout since 2013, when it received a package worth $6.7 billion from the IMF.
