China may park $2b in Pakistan reserves this month
In a positive development, China is most likely to park $2 billion in Pakistan reserves sometime in the ongoing month of December, and, more importantly, the economic diplomacy with the UAE is also going to fetch the dividends.
A private news agency interviewed a high ranking official, privy to the developments on Pakistan’s economic crisis. And this is what he told the news agency.
1. In the month of January 2019, the country is most likely to attain $6 billion facility as is managed from Saudi Arabia, a senior official, privy to the development, told a private news agency.
2. “UAE will also deposit $3 billion in Pakistan reserves, but in installments’ mode, and would also extend oil facility of $3 billion on deferment payment too.”
3. To a question the official said that China will deposit $2 billion not in installments but most likely in one-go. He further explained saying that apart from it, Pakistan authorities are also in process to finalise the purchase of 15 billion RMBs (Yuan) at commercial rate almost at the cost of over $2 billion for trade with China in local currency which will help Pakistan come out of US dollar’s pressure too.
4. The expected relief from China in December and from the UAE in January next year will provide mammoth solace to the PTI government. However, he said, China wants Pakistan not to highlight its assistance for strengthening the reserves.
5. The official said that the latest statement by Asad Umar that Pakistan is not in a hurry for the IMF bailout package indicates that impending relief from China and UAE to support the foreign reserves is on the cards.
6. The official, while referring to Asad Umar, the Finance Minister of Pakistan, who is also on the record saying balance of payment issue is over, said that Mr Umar was in knowledge that things are moving with China and UAE in positive trajectory and now behind-the-scene talks with both the countries have got matured indicating that China and UAE are all set to come forward to bailout Pakistan from the current economic morass.
7. Pakistan has already got $2 billion out of $3 billion promised by S Arabia to strengthen the foreign exchange reserves. Only $1 billion is left that Pakistan is yet to receive from S Arabia. According to State Bank of Pakistan Abid Qamar country will get remaining $1 billion from S Arabia in the month of January 2019. Apart from it, Pakistan has started availing the oil facility of $3 billion on defer payment.
8. However, the official said that Pakistan’s authorities are still in touch with IMF for about $6-7 billion package. Pakistan direly needs the comfort letter for the Fund for move financial ties with international financial institutions (IFIs).
9. It is pertinent to mention here that The News, in its edition of November 7, 2018, had published the story of this scribe quoting a cabinet member that China has indicated that it will place $2 billion in Pakistan reserves to provide Pakistan’s financial managers a sense of confidence with regard to reserves situation.
To read more click here