Pakistan to get $600 million from China to stabilize its economy, says Prime Minister Shebaz Sharif

Pakistan’s finances have been further boosted by the cash-strapped country securing an additional $600 million loan from its long-time ally China, Dawn reported on Tuesday.

Pakistan’s Prime Minister Shehbaz Sharif said the loan is aimed at boosting the country’s foreign exchange reserves, which have already received a boost thanks to a $3-billion bailout package from the International Monetary Fund (IMF).

The loan comes on top of substantial financial assistance provided by China over the past three months. Beijing rolled over $5 billion in loans to Pakistan during this period, helping the debt-ridden nation avoid a potential default as negotiations for an IMF bailout continued.

Pakistan received a $3 billion bailout from the IMF on June 30, with an initial tranche of about $1.2 billion already disbursed.

Prime Minister Sharif noted that China’s Exim Bank has provided a $600 million rollover loan, which has boosted the country’s foreign exchange reserves.

Acknowledging the growing foreign exchange reserves, Prime Minister Sharif expressed his desire to generate income rather than relying solely on loans.

Last week, Pakistan also received a $2 billion deposit from Saudi Arabia.

„I would especially like to thank my brother Saudi Crown Prince and Prime Minister Muhammad bin Salman for securing this funding for Pakistan,” Sharif said in a tweet after receiving the aid from Saudi Arabia.

In positive news for Pakistan’s economy, the State Bank of Pakistan reported a current account surplus of $334 million for June. This surplus indicates a positive balance between the country’s exports and imports.

Finance Minister Ishaq Dar noted that the International Monetary Fund, Chinese loans and $2 billion from Saudi Arabia and the UAE’s $1 billion financing following the IMF agreement have jointly contributed to the stabilization of Pakistan’s economy.

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(Inputs from PTI)

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