Islamabad, February 22
Pakistan’s all-weather ally China has approved a loan of USD 700 million and the funds will be transferred to the central bank this week, Finance Minister Ishaq Dar announced on Wednesday as the cash-strapped country tried to avert a financial crisis.
Pakistan on Wednesday announced a raft of austerity measuresA gross 15% reduction in the current expenditure of each federal government department announcedCabinet ministers and advisors to not draw salaries and not stay at five-star hotels during foreign trips
The announcement by Dar on the loan by the Board of China Development Bank (CDB) came a day after Pakistan’s National Assembly unanimously passed a money bill aimed at raising tax revenues to fulfil the demands set by the International Monetary Fund (IMF) for seeking a USD 1.1 billion loan facility to avoid an economic meltdown. Dar said all formalities have been completed with CDB.
“Formalities have been completed and the Board of China Development Bank has approved the facility of USD 700 million for Pakistan. This amount is expected to be received this week by the State Bank of Pakistan which will shore up its forex reserves!” Dar tweeted.
The country needed about USD 10 to USD 12 billion by June to pay back loans and meet the current account deficit.