Pakistan receives $500m from China's ICBC bank

Pakistan has received a loan tranche from China of $500 million that will help the country shore up its depleting foreign exchange reserves as the government battles an ongoing economic crisis.

Finance Minister Ishaq Dar confirmed the receipt of the $500m by the State Bank of Pakistan from the Chinese Industrial and Commercial Bank of China Ltd (ICBC) in a tweet on Friday evening.

“State Bank of Pakistan has received today in its account from Chinese Bank ICBC US $ 500 million. It will shore up forex reserves of Pakistan," the finance minister said.

The latest transfer is the second disbursement of US$500m for Pakistan as part of a US$1.3b rollover facility from China's ICBC, documentation for which was completed earlier this week.

“Out of #Chinese ICBC’s approved rollover facility of US$1.3 billion (which was earlier repaid by Pakistan to ICBC in recent months), documentation for second disbursement of US$500 million has been completed by Finance Ministry for release of funds to the State Bank of Pakistan," the finance minister had said in a tweet on Thursday.

The central bank had received the first $500m instalment from the ICBC earlier this month as part of efforts by the friendly country to help Pakistan avert an imminent default on foreign debt as it battled the ongoing financial crisis.

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China had extended the tranche after Islamabad fulfilled almost all the tough conditions pre-requisite for revival of the IMF loan programme, with the government claiming that it should reach a staff-level agreement with the global lending institution soon.

Earlier this month, Dar had announced the approval of the $1.3b rollover facility, which he said would be disbursed in three instalments.

Almost all multilateral and bilateral creditors have been waiting for revival of Pakistan's IMF loan programme to implement their financial commitments amounting to over $9 billion to help the flood-hit devastated nation.

However, Beijing ended its wait for the IMF nod earlier this month and came forward to save Islamabad from a likely default.