Tag: SAFE deposits

  • China approves rollover of $2 billion SAFE deposits for Pakistan

    China approves rollover of $2 billion SAFE deposits for Pakistan

    China has given approval for the rollover of $2 billion State Administration of Foreign Exchange (SAFE) deposits for a year. Pakistan’s Finance Minister, Ishaq Dar, confirmed, stating that the rollover was a requirement of the International Monetary Fund (IMF).

    The IMF had requested the rollover of Chinese SAFE deposits to fulfill external financing needs and move towards a staff-level agreement. The agreement involves filling nine tables under the Memorandum of Economic and Financial Policies (MEFP), including a table related to the Net International Reserves (NIR) as an indicative target.

    This target cannot be met without incorporating the external financing needs of the program period until the end of June 2023. The IMF has asked Pakistan to bridge the gap of $6 billion to ensure its credibility and avoid default. This condition was put forth largely because representatives of Gulf countries on the Executive Board had made commitments before the approval of the seventh and eighth reviews for providing financial assistance to Islamabad in various forms.

    Now, the IMF is seeking the support of Saudi Arabia, the UAE, and Qatar to help Pakistan’s struggling economy. The Fund has warned Islamabad that its credibility would be at stake if the staff-level agreement is finalised, and Pakistan fails to materialize its commitment from the bilateral partners, which could lead to default.

    The IMF is investigating why Pakistan’s bilateral partners are not fulfilling their earlier commitments. China is the only country that has come forward to rescue Islamabad by fulfilling its commitments on the re-financing of its commercial loans as well as the rollover of its SAFE deposits.

  • Pakistan seeks rollover of SAFE deposits worth $2 billion from China in March 2023

    Pakistan seeks rollover of SAFE deposits worth $2 billion from China in March 2023

    Pakistan seeks the rollover of $2 billion in State Administration of Foreign Exchange (SAFE) China deposits in March 2023. Federal Minister for Finance and Revenue Ishaq Dar, received a visit from Nong Rong, the People’s Republic of China’s ambassador, at the Finance Division.

    According to APP, Dar emphasised the long-standing friendship and kinship ties between Pakistan and China.

    The finance minister also thanked the Chinese leadership for their assistance in refinancing a syndicate facility worth RMB 15 billion ($2.24 billion) for Pakistan. He also asked the ambassador to help facilitate the rollover of $2 billion in SAFE China deposits in March 2023.

    Dar informed the ambassador of the costs to the overall economy as well as the harm done to Pakistan’s infrastructure, agriculture, lives, and property by the severe floods. He expressed gratitude to the Chinese government for providing the government and people of Pakistan with unwavering support during this difficult time.

    In reference to the CPEC, the finance minister stated that the economic corridor will be crucial in advancing Pakistan’s economy and fortifying bilateral ties between the two nations. He further pledged his unwavering support for the aid in realising the success of CPEC.

    The minister received Nong Rong’s congratulations on taking up his new duties. The envoy underlined China’s continuous support for Pakistan and emphasised how China is a rock for the Pakistani people in this time of need.

    “Since the devastating floods occurred in Pakistan, among all countries, China has announced over 644 million RMB (around 90 million dollars), the biggest amount of assistance to Pakistan,” said Nong Rong, in a tweet.