INSUBCONTINENT EXCLUSIVE:
growing reliance on Beijing for financial support.Lending to Pakistan by China and its banks is on track to hit $5 billion in the fiscal
year ending in June, according to recent disclosures by officials and Pakistan finance ministry data reviewed by Reuters.The ramp up in
In February, Washington led efforts that saw Pakistan placed on a global terror financing watchlist, drawing anger in Islamabad amid fears
reserves, which tumbled to $10.3 billion last week from $16.4 billion in May 2017.The talks come only weeks after a group of Chinese
deficit have prompted many financial analysts to predict that after the general election, likely in July, Islamabad will need its second
International Monetary Fund (IMF) bailout since 2013
senior Pakistan government official, saying the funds will come from Chinese state-run institutions.A second government official confirmed
problems with the economy are coming to the fore
governor of the central bank, the State Bank of Pakistan (SBP), back in 2013.The darkening macroeconomic outlook prompted the IMF earlier
this month to downgrade its economic growth forecast for Pakistan to 4.7 percent for the next fiscal year ending in June 2019, way below the
combat its ballooning current account deficit, including hiking tariffs on more than 200 luxury items and devaluing its currency by about 10
percent.In the six months to end of March, Pakistan took bilateral loans worth $1.2 billion from China, according to the Pakistan Finance
Ministry document reviewed by Reuters
During this period the government also borrowed about $1.7 billion in commercial loans, mostly from Chinese banks, finance ministry
Bank of Pakistan Governor Tariq Bajwa told the Financial Times (FT)
A spokesman for the central bank told Reuters the FT report was accurate.The $1-2 billion under discussion would be in addition to that
The currency is now trading at about 115.50/116 to the United States dollar, down 9.8 percent in last six months after two separate
devaluations since December.In the past three weeks, reserves have declined by $1.2 billion and now stand at two months worth of import
economists are predicting another currency devaluation by the end of 2018.Pakistan may also seek help from Saudi Arabia
The Middle Eastern ally loaned $1.5 billion to Pakistan in 2014 to shore up its foreign currency reserves.RISING EXPORTSThe scale of the
task facing Pakistan is huge as the current account deficit widened to $14 billion in the first 10 months of the current fiscal year,
Dollar-denominated debt repayments in 2018 are also expected to top $5 billion, analysts say.Part of the problem for Pakistan has been a
multi-year consumer boom accompanied by huge imports of Chinese machinery for CPEC projects, which has piled pressure on the current account
More recently, a jump in the oil price has compounded the problem as Pakistan is a fuel importer.One of the senior Pakistani government
officials said the money from China should give the economy breathing space.He said exports have shot up in the last two months, helped by
