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Tuesday Jan 01 2019

China to lend $2bn to Pakistan to boost foreign exchange reserves: report

Chinese President Xi Jinping meets Pakistani Prime Minister Imran Khan at the Great Hall of the People in Beijing, November 2, 2018-Reuters

China has agreed to lend at least $2 billion to Pakistan for helping it boost its dwindling foreign exchange and tanking currency, Financial Times reported.

The report, quoting two senior Pakistan government officials, said the loan is aimed at helping with a weakening fiscal position and high debts.

“China’s promise to Pakistan is an indication of their commitment to help us avoid a crisis. If the rupee falls sharply and we need to prevent its slide, we can turn to China,” a senior government official in Islamabad told FT.

In November, Geo News quoted sources as saying that Pakistan is expected to receive a $6 billion economic package from China during PM Imran's visit. A loan of $1.5 billion and a grant of $1.5 billion are expected to be offered, along with an additional package of $3 billion for CPEC. PM Imran had visited the country on November 2.

Pakistan is also in talks with the International Monetary Fund (IMF) for a financial bailout package.