SBP receives $700mn from China Development Bank, says Ishaq Dar

The State Bank of Pakistan (SBP) has on Friday received $700 million from China Development Bank, announced Finance Minister Ishaq Dar, a development that gives a much-needed boost to the country’s foreign exchange reserves.

Earlier this week, Dar had said that the Board of China Development Bank approved the disbursement, and that the amount is expected to be received this week.

The China Development Bank is a state-funded and state-owned development finance institution responsible for raising funds for large-scale infrastructure projects.

Foreign exchange reserves held by the State Bank of Pakistan (SBP) increased $66 million to $3.26 billion, data released on Thursday showed.

The level of reserves is at less than one month of import cover, leaving Pakistan’s policymakers scrambling to secure inflows at a time when the country’s bailout programme with the International Monetary Fund (IMF) remains stalled.

An IMF delegation left Pakistan earlier without a staff level agreement. However, Dar notified the receipt of Memorandum of Economic and Financial Policies (MEFP) with other officials in Islamabad reiterating that talks with the lender were ongoing.

Meanwhile, Pakistan has moved to implement several prior conditions of reviving the programme including passing in haste a ‘mini-budget’ that imposed nearly Rs170 billion of taxes earlier this week.