Pakistan to receive $2.1 billion loan from China by March 25

In this file photo, Pakistani Prime Minister Imran Khan, left, and China’s Premier Li Keqiang attend a welcome ceremony at the Great Hall of the People in Beijing on Nov. 3, 2018. (AFP)

• Pakistani finance ministry says loan will “help improve foreign exchange reserves and ensure balance of payment stability”
• Pakistan also “closely engaged” in bailout discussions with the IMF

ISLAMABAD: Pakistan will receive a loan worth $2.1 billion from staunch ally China by Monday, the Pakistani finance ministry said, an injection that will help stabilize a wobbly economy hurt by a shortage of dollars plus ballooning current account and fiscal deficits.
Pakistan has been searching for investment from friendly countries since the government of Prime Minister Imran Khan took office in August.
Both Saudi Arabia and the United Arab Emirates have each offered Islamabad loan packages of $3 billion. Islamabad is also in talks with the International Monetary Fund (IMF) for a bailout deal expected to be signed next month. 
Unlike China and countries in the Middle East, the IMF is likely to demand painful structural reforms that might clash with the political agenda of Khan, who on the campaign trail vowed to build an Islamic welfare state.
“All procedural formalities for the loan worth $2.1 billion from China have been completed,” Dr. Khaqan Hassan Najeeb, the spokesperson for the Ministry of Finance, told Arab News, adding that the amount would be deposited in the central bank of Pakistan by March 25 to “help improve foreign exchange reserves and ensure the balance of payment stability.”
In November last year, China promised to support Pakistan’s economy following a meeting in Beijing between Chinese Premier Li Keqiang and Prime Minister Khan. The two countries also share the $60 billion China-Pakistan Economic Corridor (CPEC), which Beijing touts as the flagship infrastructure program in its vast Belt and Road Initiative.
On Friday, Gerry Rice, Director of Communications at the IMF, said at a press conference that the Fund was “closely engaged” in discussions with Pakistan for a loan deal and would take a mission to Pakistan “shortly.”
“I can’t put a date on when they [discussions] would conclude or when we would be in a position to announce agreement,” Rice added.
Fitch Solutions, a statistical rating organization headquartered in New York, said in a statement last month that Pakistan and the IMF could reach an agreement for a potential bailout package of about $12 billion.