As per the requirement of the International Monetary Fund (IMF), the Federal Government has officially announced the formal numbers of foreign loans. China, being the strongest strategic ally of Pakistan is leading the loan charts with a massive 75% of the total foreign loan.
The loan from China in the current fiscal year stands at 6.5 billion USD, out of the total 8.6 billion USD of foreign loans. The Chinese 2 billion USD of SAFE Deposits (State Administration of Foreign Exchange) received in July 2018, was also declared in the books of State Bank of Pakistan (SBP), in addition, 2.53 billion USD was received from the neighbor in foreign commercial loans. The undergoing K2 and K3 projects are funded by China.
The declaration of Chinese loan was required by the IMF during the negotiations on the 6 billion USD bailout package. The information taken by the IMF is likely to ensure the restriction of Chinese loan’s repayment from the bailout package.
Pakistan has also received 3 billion USD from Saudi Arabia and 2 billion USD from the United Arab Emirates. Moreover, the Islamic Development Bank also granted 35 million USD commercial loan for oil payments to Saudi Arabia.
Pakistan is currently seeking to resume the blocked budgetary support from traditional multilateral lenders, following the IMF’s package. The support was blocked due to unfavorable macroeconomic conditions.