Pakistan reportedly obtained worth $13bn financial support
Finally, there is cause for celebration as Pakistan is reported to have obtained an additional $13 billion in financial support from two longtime allies – roughly $9 billion from China and more than $4 billion from Saudi Arabia.
The Chinese government agreed to refinance $3.3 billion in commercial bank loans, roll over $4 billion in sovereign loans, and expand currency swap by around $1.45 billion, from 30 billion to 40 billion yuan.The final figure came to $8.75 billion.
When asked questions about Saudi Arabia, Ishaq Dar responded favourably and reassured the audience that they had done so.
According to Mr. Dar, the Chinese side had also agreed to expedite the procedure for the $9.8 billion Main Line-1 high-speed rail project from Karachi to Peshawar.
The finance minister added that China’s and Saudi Arabia’s leaders had guaranteed the country’s prime minister, Shehbaz Sharif, of their cooperation and that Saudi Arabia would also construct a $10–12 billion petrochemical refining plant at Gwadar.
To assure non-debt generating foreign inflows, Pakistan also involved the KSA in privatisation transactions such as LNG power projects and shares in other organisations.
According to Dar, there is an agreement that both nations will meet Pakistan’s financial needs till June 2023. According to the minister, China has promised to quicken the pace of construction on ML-1 and the Karachi Circular Railway.
Low foreign exchange reserves, a poor credit rating from the international financial agencies, and currency depreciation are all problems for Pakistan.
The minister claimed throughout his speech that the rupee’s actual effective exchange rate (REER) was closer to Rs194 than Rs200. He hoped that the participants would put the interests of the country before personal gain.
Pakistan reportedly obtained worth $13bn financial support
Even though the finance minister stated that he was in favour of a market-based currency rate, he added that the rupee could not be held hostage by a small number of speculators. He asserted that the strengthening of the currency will also help lower inflation.
Ishaq Dar stated that the government has opted against contacting the Paris Club regarding debt restructuring.
