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China to extend $3.5bn to Pakistan in grant, loans

ISLAMABAD: China has promised to extend $3.5 billion in grants and loans, besides financing socio-economic development plans being embarked upon by the incumbent government.

The fresh move of the Pakistan closest ally is aimed at boosting the country’s dwindling foreign exchange reserves.

According to a Voice of America (VOA) report, China will soon park $2.5 billion in the State Bank of Pakistan (SBP), raising the total amount of commercial loans to Islamabad this financial year to $4.5 billion.

Officials revealed Beijing has also pledged an additional $1 billion for health, education, drinking water, vocational training and poverty alleviation projects over the next three years.

Minister for Planning, Development and Reform Makhdoom Khusro Bakhtiar stated Chinese experts will arrive in Islamabad later this month to systemize social-economic development under the pledged grant.

The country’s foreign exchange reserves have remained under continuous stress and were recorded at $8.2 billion as of February 8th, registering a weekly increase of $13 million.

Overall foreign exchange reserves including those held by commercial banks were recorded at $14.896 billion as of the above-mentioned period.

The central bank reserves had dropped below the $7 billion mark before Saudi Arabia’s pledged $3 billion and UAE’s $1 billion were received under the financial rescue package reached, helping to push the reserves over $8 billion.