Pakistan asked China on Friday to swiftly approve the refinancing of a $500 million commercial loan and deliver 125,000 metric tonnes of urea that had already been approved, two concerns that explain the country’s economic situation.
Ishaq Dar, the finance minister, made the requests to Nong Rong, the Chinese ambassador, who then called on Dar. Along with other senior employees from the financial division, Tariq Bajwa, the Special Assistant to the Prime Minister on Finance, attended the meeting.
An official informed the sources that during the lengthy discussion, “both sides discussed lingering matters that require action to show visible results from Prime Minister Shehbaz Sharif’s recent visit to Beijing.”
The Chinese ambassador to expedite the refinancing of the $500 million loan from the Industrial and Commercial Bank of China, according to sources in the finance ministry (ICBC). Pakistan returned the money it is now requesting China to refinance this month.
Pakistan’s gross official foreign exchange reserves decreased to $7.8 billion as a result of the repayment of the Chinese loans, just enough to finance one and a half months’ worth of imports.
To repay a $1 billion Sukuk bond next month, Pakistan is counting on the Chinese loan and a $500 million credit from the Asian Infrastructure Investment Bank (AIIB). Jameel Ahmad, the governor of the State Bank of Pakistan (SBP), announced on Friday that Pakistan will repay the $1 billion loan on December 2.
To plant wheat and other crops, the nation requires crucial agricultural inputs because it is difficult to close the gap between supply and demand. There may be a scarcity of urea next month, it is thought if imports are not secured promptly.
On October 27, 2022, the ECC approved a proposal allowing the Trading Corporation of Pakistan (TCP) to import 300,000 metric tonnes of urea fertilizer based on the lowest offer made by M/s Makhdoom Logistics Services for $520 per metric tonne. However, M/s Makhdoom breached its obligations without incurring any significant fine because the TCP opportunistically only had a $500,000 surety bond.
During the prime minister’s visit to China, the matter was also discussed with the Chinese side.
