China to Help Pakistan Cover Current Account DeficitChina to Help Pakistan Cover Current Account Deficit

China to Help Pakistan Cover Current Account Deficit

China to Help Pakistan Cover Current Account Deficit: As a result of rising current account deficit that have gone upto $14.035 billion in the first 10 months and resulting into slashing down of foreign currency reserves with every passing week, Pakistan is looking towards China as the last available option with expectations of receiving $01 to $02 billion on account of safe deposits before June 30, 2018.

If China does not rescue Islamabad, then there will be no other choice but to knock at the door of the IMF as lender of last resort for all countries facing balance of payment crisis and avoiding default on external payment position.

“We will be able to build up our reserves to better position next month,” Another top official said, “Wait and see” as something was in the pipeline, which would be materialized most probably by next month”.

China to Help Pakistan Cover Current Account Deficit
China to Help Pakistan Cover Current Account Deficit

One top official of the Finance Ministry confirmed that Pakistan did not make any formal request to China for keeping dollars in the shape of safe deposits into the State Bank of Pakistan (SBP), but Beijing had conveyed through informal channels that they might sanction putting $01 to $02 billion for keeping into Pakistan’s central bank in a bid to jack up the dwindling foreign currency reserves. At the moment, China’s $500 million are lying into safe deposit with the SBP.

Pakistan had returned safe Chinese deposit to Beijing when the country’s reserves had reached comfortable position after graduating the IMF programme successfully during the tenure of former finance minister Ishaq Dar in September 2016.

According to the plan of the Ministry of Finance, Pakistan will be receiving $01 to $02 billion from China for keeping into safe deposit and then the government will go for launching Eurobond in the range of $02 billion.

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