In a boost to critical levels of foreign exchange reserves, the Board of China Development Bank (CDB) has approved the disbursement of $700 million for Pakistan, said Federal Minister for Finance and Revenue Ishaq Dar on Wednesday.

“Formalities completed and Board of China Development Bank has approved the facility of $700 million for Pakistan,” Dar announced on Twitter.

“This amount is expected to be received this week by the State Bank of Pakistan (SBP), which will shore up its forex reserves,” added Dar.

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

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The development comes as foreign exchange reserves held by the SBP increased $276 million to $3.19 billion, data released last week showed.

Total liquid foreign reserves held by the country stood at $8.7 billion. Net foreign reserves held by commercial banks stood at $5.51 billion.

The week before that, foreign exchange reserves had dropped $170 million to a mere $2.92 billion.

The central bank reserves, which stood at nearly $18 billion at the start of 2022 but have undergone significant depletion in recent months, underscore the urgent need for Pakistan to complete the next review of the International Monetary Fund (IMF) programme.

Pakistan remains in talks with the IMF for the resumption of the stalled Extended Fund Facility (EFF) programme.

It expects to conclude talks over a staff-level agreement as soon as this week, Hamed Yaqoob Sheikh, the top official in the finance ministry, said in what would be a crucial step towards unlocking funds to battle an economic crisis.