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China extends $2.5 billion loan to Pakistan to boost foreign exchange reserves

China has again rushed to bail out Pakistan by providing $2.5 billion in aid to support its cash-strapped ally’s fast-draining foreign exchange reserves, months after renewing a $2.5 billion loan. $4.5 billion that was to be paid this year.

The Chinese aid announcement came after France signed an agreement with Pakistan to suspend its $107 million loan under the Debt Service Suspension Initiative (DSSI). ) of the G20.

The agreement was signed by Economic Affairs Ministry Secretary Mian Asad Hayaud Din and French Ambassador Nicolas Galey, Pakistan’s Economic Affairs Division said in a statement on Monday.

“China and Pakistan are all-weather strategic cooperative partners. China always supports Pakistan in growing its economy, improving livelihoods and maintaining financial stability,” said the door. -Chinese Foreign Ministry spokesperson Zhao Lijian at a press conference while answering a question about China’s supply of 15 billion RMB. (2.3 billion USD) in Pakistan to build up its dwindling foreign exchange reserves.

Pakistani media quoted Prime Minister Shehbaz Sharif as saying Pakistan hoped to get $2 billion from the IMF.

China’s latest aid comes on top of Beijing’s renewal of a $4.5 billion debt due from Islamabad in March this year and $2.5 billion given in 2019 to boost reserves currency exchange of Pakistan.

Pakistan is the second country in the subcontinent after Sri Lanka to face a severe economic crisis despite massive Chinese investments and loans.

China had circumvented desperate pleas from Sri Lankan leaders before the country filed for bankruptcy and paid off all of its external debt totaling $51 billion.

The new Chinese assistance to Pakistan follows the visit of Pakistani Army Chief General Qamar Javed Bajwa this month, during which the two countries agreed to intensify cooperation in defense and countermeasures. terrorism.

Last month, Pakistani Foreign Minister Bilawal Bhutto made his first visit to Beijing and held talks with his Chinese counterpart Wang Yi.

Cash-strapped Pakistan is facing increasing economic challenges, with high inflation, dwindling foreign exchange reserves, a growing current account deficit and a depreciating currency.

Chinese banks have agreed to refinance Pakistan with $2.3 billion in funds in massive relief for the cash-strapped country to help bolster its depleting foreign exchange reserves, Pakistani minister says of Finance Miftah Ismail earlier this month.

Pakistan is facing an uncertain economic situation due to a delay in reviving a stalled multi-billion dollar program from the International Monetary Fund (IMF).

Saudi Arabia has agreed to provide Pakistan with a “significant package” of around $8 billion to help the country revive its struggling economy. Saudi Arabia provided $3 billion in deposits to the State Bank of Pakistan in December 2021, while the Saudi Petroleum Facility was commissioned from March 2022, providing Islamabad with $100 million to get oil.

Saudi Arabia provided $3 billion in deposits to the State Bank of Pakistan in December 2021, while the Saudi Petroleum Facility was operational from March 2022, providing Pakistan with $100 million to procure petrol.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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