Islamabad:
The Minister of Finance, Muhammad Aurengzeb, requested on Wednesday to China to transmit the guaranteed debt and also increase the current size of the currency exchange agreement of $ 4.3 billion destined to cushion the low currency reserves.
The requests were made to the Chinese Finance Minister Lan Fo’an, regardless of spring meetings of the International Monetary Fund (IMF), according to the officials of the Ministry of Finance. The bilateral meeting remained “very positive and constructive,” officials said.
Aurengzeb also invited Chinese and Saudi Arabia ministers to visit Pakistan.
The high -level participation focused on strengthening the bilateral economic cooperation and the support of the reaffirmed partners for the Pakistan reform agenda under the IMF extended background (EF) program, according to a press release issued by the Ministry of Finance after the meeting.
He added at his meeting with Lan Fo’an, Minister of Finance of China, Senator Muhammad Aurengzeb recalled his last meeting held in Beijing in July 2024 and thanked China to the Government of China for its unwavering support for the socio -economic development of Pakistan and for its support of Pakistan’s economic program backed by EFF of the IMF.
China has assured the IMF to reinvest the cash deposit of $ 4 billion of Pakistan.
The officials said that among the problems that Pakistan took with China, he was rescheduing the exim Chinese bank debt that matured during the possession of the IMF program and increased the size of the bilateral currency exchange agreement.
The Minister of Finance had also made these applications last year, but so far formal approvals have not been given by China.
The Government is looking for the reprogramming of the Export Bank (EXIM) of the Bank of China that is maturing until September 2027.
The officials said that the question of increasing the limits under the currency exchange agreement was also approached with the Chinese authorities. They did not reveal the additional amount that Pakistan sought on loan under the exchange agreement. Pakistan has already used the CNY 30 billion CNY or a Chinese shopping center of $ 4.3 billion to pay their debts.
In October last year, the Minister of Finance had asked China to increase this limit by an additional 10 billion CNY, translating to $ 1.4 billion at the current exchange rate. If Beijing accepts, the total installation will reach approximately $ 5.7 billion.
The gross official foreign exchange reserves of Pakistan are still low in around $ 10.6 billion, which wants to increase to more than $ 14 billion in the next two months in the back of new loans and higher remittances. The reprogramming of the Exim Bank debt will also help close the external financing gap identified during the IMF program period.
The external financing gap of Pakistan projected in September of last year should reduce significantly, since the World Bank has projected a current account surplus of $ 800 million for this fiscal year compared to previous estimates of approximately $ 3.7 billion deficit.
The minister also provided an update on the state of the Panda Bonus and requested the support of Banco Popular de China (PBOC) to accelerate the issuance process, according to the Ministry of Finance.
Aurengzeb also reported to the Chinese side about the key reforms carried out in the taxes of taxes, energy, privatization, public finance and state companies (SOE), said the Ministry of Finance.
The Ministry of Finance also published its monthly economic perspective, predicting gradual recovery in large -scale manufacturing amid the decrease in production during the last two years.
The report indicated that the perspectives for large -scale manufacturing can gradually improve in the coming months, and the recovery is expected to be gradual amid the continuous annual contraction and the recent monthly decrease.
He said that improvements in high frequency indicators, such as increased car production, imports of raw materials and a more accommodated monetary posture, indicates a cautious optimism.
It is likely that improved climatic conditions and greater water availability support greater crops and better agricultural conditions that contribute to general economic growth.
The Ministry of Finance said that inflation is expected to remain between 1.5 and 2% in April, with a possible increase of 3 to 4% in May 2025.
The World Bank and the International Monetary Fund reduced Pakistan inflation projections this week to 5.1-5.5%.
The Ministry of Finance said that exports and remittances are expected to maintain their upward trend in the coming months keeping the current account within the manageable range. The remittances last month reached the high record level of $ 4.1 billion.
Muhammad Aurengzeb also held an important meeting with Saudi Finance Minister Mohammed Aljadaan, in Washington, DC, according to the Ministry of Finance. The minister thanked Aljadaan for the long and strong support of Saudi Arabia to Pakistan in his search for economic development, even through support for the IMF program, he added.
Saudi Arabia has agreed a cash deposit of $ 5 billion for one more year.
