Ishaq Dar announces receipt of $500 mn from ICBC

Finance Minister Ishaq Dar on Friday announced the receipt of $500 million from Industrial and Commercial Bank of China (ICBC) by the State Bank of Pakistan (SBP) after the government of Pakistan completed documentation for its disbursement.

In a tweet, he said “SBP has received today in its account from Chinese Bank ICBC $500 million. It will shore up forex reserves of Pakistan.”

On Thursday, Dar announced the completion of documentation for $500 million disbursement.

“Out of Chinese ICBC’s approved rollover facility of $1.3 billion (which was earlier repaid by Pakistan to ICBC in recent months), documentation for second disbursement of $500 million has been completed by Finance Ministry for release of funds to the State Bank of Pakistan (SBP),” said Dar in a tweet.

Earlier this month, Pakistan’s central bank received $500 million from China’s ICBC, the first of three disbursements that were approved for rollover.

Sharing the development, Dar said the formalities were complete and ICBC had approved the rollover of a combined $1.3 billion facility that had been repaid by Pakistan in recent months.

Pakistan’s central bank foreign exchange reserves currently sit at $4.32 billion, courtesy loan inflows of $500 million from ICBC and $700 million from China Development Bank. Pakistan expects another $800 million from ICBC after it renewed its $1.3-billion facility, which the country had repaid earlier.

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Still, the import cover is around one month with February’s bill clocking in at $4 billion, according to data available with the Pakistan Bureau of Statistics.

Last week, SBP Governor Jameel Ahmad had said that Pakistan needs to repay about $3 billion of debt by June, while $4 billion is expected to be rolled over, according to Bloomberg.

The central bank reserves, which stood at nearly $18 billion at the start of 2022 but have undergone significant depletion in recent months, underscore the urgent need for Pakistan to complete the next review of the International Monetary Fund (IMF) programme.

The programme has been stalled since last year, but Islamabad remains engaged with the IMF for its revival.

Last month, the IMF mission left Islamabad without inking the staff-level agreement, and instead, issued a short four-paragraph statement, stressing on timely completion of prior conditions to revive the bailout that has been stalled since last year.