Commercial Loans Will Be Taken By Pakistani Government From Chinese Banks
Commercial Loans Will Be Taken By Pakistani Government From Chinese Banks: Federal government is ready to get commercial loans from Chinese banks ranging from $1billion to $1.5 billion in the upcoming two weeks. In the wake of short term commercial loans from foreign banks $1.77 billion had already been taken for the fiscal year 2017-18. With this “more loan” strategy short-term debt will rose upto $3 billion.
Before this government planned to hit Eurobond but dropped the idea due to an increase in its rate.
Foreign Loans
Islamabad has obtained $7.608 billion in shape of disbursements from all bilateral and multilateral creditors, against budgetary estimates of $8.094 billion.
- ADB provided $546 million
- Asian Infrastructure Investment Bank (AIIB) $17.01 million
- Canada $0.16 million, China $$1.129 billion
- Islamic Development Bank (short term) $873 million
- Japan $73 million
- Multi Donor Trust Fund $38 million
- WB’s IBRD $220 million
- IDA $55.72 million
- Saudi Arabia $40.74 million
- UK $134 million as grant
- USA $42 million grant
- International bonds $2.5 billion
Current Account Deficit And Expected Inflows
The current account deficit is expected to go up to $16 billion in the current fiscal year. However, the government is expecting
- foreign direct investment will touch $3 billion mark as it had already tipped to the tune of $1.6 billion
- The private sector credit in dollars will also bring sizeable inflows.
- Planned Amnesty Scheme for nonresident Pakistanis to bring back at least $4 billion to $5 billion
Net international reserves have declined from $7.5 billion to $ 724 million till mid Feb so on immediate basis, Pakistan requires $6 billion to $8 billion to keeping its foreign currency reserves flooded. Therefore government from borrowing short-term commercial loans from the international banks will fill the gap.