ISLAMABAD: China has rolled over its safe deposit of $2 billion with Pakistan on the existing terms for a year, it emerged on Friday.
In a crucial breakthrough to win a staff-level agreement with the International Monetary Fund (IMF), China has turned over $2 billion, The News reported on Friday.
“Yes,” Finance Minister Ishaq Dar was quoted as saying in The News when asked about getting the rollover of $2 billion SAFE deposits.
The rollover of Chinese SAFE deposits was one of the conditions set forth by the IMF in order to fulfill the country’s demand for external finance and advance towards the long-awaited staff-level agreement.
The Memorandum of Economic and Financial Policies (MEFP) has nine tables that must be completed.
One of the tables is related to the Net International Reserves (NIR) as an indicative target, which cannot be fulfilled without incorporating the external financing needs of the program period till the end of June 2023.
IMF has asked Pakistan to bridge the gap of $6 billion is simply an attempt to ensure its credibility. Non-materialization may result in Pakistan sliding into default.
The Fund was forced to put forth this condition on the negotiating table largely because representatives of Gulf countries on the Executive Board had made commitments before the approval of the seventh and eighth reviews for providing financial assistance to Islamabad in different forms. These included additional deposits and investments.
Now, all eyes are on the Kingdom of Saudi Arabia (KSA), the UAE and Qatar to bail out Pakistan’s struggling economy.
