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Pakistan

Additional inflow of $500mn from China expected in few days, says Dar

  • Finance minister says ICBC has rolled over $1.3bn-facility, reiterates Pakistan will not default; blames Imran Khan for country's current economic state
Published March 3, 2023

Finance Minister Ishaq Dar said Pakistan expects further inflow of a loan facility from China, while he shared economic figures under the previous Pakistan Tehreek-e-Insaf (PTI) government and blamed Imran Khan for the country’s current economic state.

In a press conference on Friday, Dar also said Pakistan will not default on its payments to international creditors, a statement that comes amid heightened concerns over the country’s ability to meet obligations due to low foreign exchange reserves.

Press conference

The finance minister added that China has renewed a facility under which Pakistan expected an additional inflow of $500 million in the next few days and another $500 million later this month.

On back of loan from China, SBP-held foreign exchange reserves increase $556mn, now stand at $3.81bn

“Pakistan has made payments of around $2 billion to China Development Bank and ICBC (Industrial and Commercial Bank of China) and $3.5 billion have been given to banks in other countries,” he said.

“Debt is usually rolled over but the debt stock does not reduce. We are reducing debt stock,” he said. “Formalities with ICBC were completed last night. We returned $1.3 billion to it and this facility has been renewed and we will receive the amount back in 3 tranches.

“We paid back $1.3 billion in three tranches — $500 million, $500 million and $300 million. We will receive it back the same way.

“Pakistan will get $500 million in 2 to 3 days. We might receive it on Monday. Then we will get an additional $500 million in 10 days.”

Pakistan recently also received an inflow of $700 million from the China Development Bank, a loan that helped increase the central bank-held foreign exchange reserves to a little over $3.8 billion. The level is still at less than one month of import cover.

Referring to PTI and its party chief Imran, Dar said passing “loose” remarks on the economy impacts capital and financial markets.

He also underlined that “mismanagement and bad governance has brought Pakistan to this point”.

“Flood caused massive losses. Inflation during July 2022 -February 2023 was 26% and in this, the core inflation stood at 19%. The rest is imported inflation. We cannot avoid it due to floods.”

Dar continued to compare economic performance during the PTI government’s tenure, arguing that the opposition has not really improved Pakistan’s standing.

“But Pakistan will escape the economic quagmire. We are making repayments to bilateral and multilateral lenders. We have made payments beyond our capacity.”

The Ministry of Finance had earlier confirmed that the senator would hold a conference in Islamabad. Dar had also conveyed this while speaking to reporters earlier during the day.

When asked by a reporter if he was holding the presser to announce his resignation, Dar inquired if they had problems with his work. He urged them to “wait for 2 hours for my press conference at 4:10 pm”.

“I invite you all to attend it,” he said.

When told by a reporter that former Federal Board of Revenue chairman Shabbar Zaidi wanted Dar to resign, he asked “what has he (Zaidi) done for the country?”

“He made matters worse for Pakistan and he should be in jail for taking Pakistan to the brink of default,” he underlined.

When asked about his views on former finance minister Shaukat Tarin, he refused to answer.

Dar’s press conference comes at a time when the currency has seen wild swings in the inter-bank market, hitting an all-time low of Rs285.09 on Thursday after a fall of 6.7%. However, the very next day, the rupee recovered some of its losses, and closed at 278.46.

The volatile exchange rate comes in tandem with a low level of foreign exchange reserves and acute economic distress in the country, which also prompted the State Bank of Pakistan (SBP) to hike the key policy rate by 300 basis points to 20% on Thursday.

On Thursday, Dar had looked to kill speculation on Pakistan’s economy, writing: “Anti-Pakistan elements are spreading malicious rumours that Pakistan may default.”

“This is not only completely false but also belie the facts. SBP forex reserves have been increasing and are almost $1 billion higher than four weeks ago despite making all external due payments on time.”

He stated that foreign commercial banks have started extending facilities to Pakistan.

“Our negotiations with the International Monetary Fund (IMF) are about to conclude and we expect to sign Staff Level Agreement with IMF by next week. All economic indicators are slowly moving in the right direction.”

Pakistan has been unable to secure the next tranche of funding from IMF funding which is critical for the cash strapped nation.

Comments

Comments are closed.

Madman Mar 03, 2023 03:31pm
Dar sahb I hope you resign, Dollar at Rs280 salutes you
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P.C (Non Overseas Pakistani) Mar 03, 2023 04:28pm
Dar Dar go away. Don't come back another day.
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Abdulrehman Haroon Mar 03, 2023 04:39pm
I don't know why this sorry excuse of a human being keep referring back to old times. Why can't he just man up and accept the fact that he's responsible for the state of affairs Pakistan finds itself in.
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Qasim Mar 03, 2023 04:47pm
Our economists like our common man are confused whether to control the dollar exchange rate or leave it to market speculators. When Dar tries to control it they starts crying and when it is at mercy of speculators they are again crying..
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JUMMAH Mar 03, 2023 04:47pm
Dar sb you are a great electra man, you come to change the LED bulb of pakistan but unfortunatly you burn the whol country wiring, WTF man, go away from the Muslim countury
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P.C (Non Overseas Pakistani) Mar 03, 2023 04:50pm
And what about running through our Forex reserves by laying down an artificial floor for the rupee? Scam artist...
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Arshad Mar 03, 2023 04:56pm
Your Incompetense change the slogan of "Pakistan Zindabad" to "Pakistan ZindaBhag" in last 11 months.......
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bonce richard Mar 03, 2023 04:57pm
@Madman, Mr. Dar belongs to Punjabi we know them since 1947 they have never been loyal to the country. Nawaz made billions of dollars and bought property in the UK. They separated our country in 1971. The role of Gen Niazi everyone knows how he was corrupted.
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PAkistan Mar 03, 2023 05:07pm
why you have take this govt if you are not control economic.. GO DAAAR
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PAkistan Mar 03, 2023 05:07pm
GO DAAR GOO
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Shiteistan Mar 03, 2023 06:05pm
Everyone else is to blame. I am wonderful. Is there no one that can get rid of this buffoon?
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Az_Iz Mar 03, 2023 06:21pm
Getting rid of Miftah and bringing back the incompetent Dar to repeat his past mistakes was a big mistake.
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Az_Iz Mar 03, 2023 06:26pm
A country with no significant natural resources, cannot run on subsidies and a consumption led economic growth. It will keep hitting the ceiling of limited dollars to pay for it. IMF will not keep writing checks , with easy terms, for this cycle to repeat forever. Time for course correction, by getting rid of Dar, as a first step.
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Az_Iz Mar 03, 2023 06:28pm
Better late than never. Time for course correction. From subsidies and consumption, to savings and investment.
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Yogesh(India) Mar 03, 2023 06:56pm
Is Pakistan a mad nation?? If you want the same money back then why you give it to lender.
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Tulukan Mairandi Mar 03, 2023 08:42pm
Is he gonna declare public holiday for this "wonderful news"?
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KhanRA Mar 03, 2023 08:56pm
Loans loans and more loans.
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KhanRA Mar 03, 2023 08:58pm
@Yogesh(India), this isn’t the act of the Nation. Ishaq Dar doesn’t represent us. This government wasn’t even elected. Everyone knows what misery this unelected government has brought to us.
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Tulukan Mairandi Mar 04, 2023 11:34pm
Iron brother China, with whom relations are deeper than ocean and sweeter than honey must: 1. Forgive all loans and give $20 bn more without tieing to IMF 2. Compensate us for losses caused by Chinavirus (Covid 19) 3. Pay Liquidated Damages for CPEC delays 4. Pay losses for ecological and social damages caused by CPEC and chinese pollution that caused floods 5. Pay compensation for low quality chinavirus (Covid 19) vaccine, tanks, trains, drones and ships.
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