Islamabad: Pakistan has informed the International Monetary Fund (IMF) that Islamabad has urged China to rollover $2 billion in State Administration of Foreign Exchange (SAFE) deposits by one year, according to sources
“We have already requested the rollover of $2 billion in SAFE deposits that will expire at the end of this month from the Chinese side,” insiders informed the publication.
At Monday night’s virtual parleys with the Fund, the Finance Ministry and State Bank of Pakistan (SBP) reportedly disclosed their external funding plan. Pakistan has informed the IMF that it intends to increase its rapidly diminishing foreign exchange reserves to $10 billion by the end of June.
According to plans, the renewal of the IMF programme will enable Islamabad to get the necessary dollar cash from all feasible sources, including multilateral, bilateral, and commercial financing, as well as the rollover of China’s anticipated $2 billion SAFE deposits, sources told The News. The overall amount of Chinese SAFE deposits was $4 billion, and the remainder would mature in a few months.
Another official informed the magazine that China had verbally approved the $2 billion rollover of SAFE deposits. Yet, it was desirable that Beijing make an official announcement.
IMF pact
In the meantime, Pakistan informed the IMF that Islamabad has executed all of the lender-suggested severe steps, and both parties should now proceed swiftly towards the signature of the staff-level agreement (SLA).
Reuters cited IMF Resident Chief Esther Perez Ruiz as saying, “All IMF programme reviews require firm and credible assurances that there is adequate financing to ensure that the borrowing member’s balance of payment is completely covered for the duration of the programme.”
Last week, Finance Minister Ishaq Dar told reporters that external funding confirmation was not a need for the IMF to sign a staff-level agreement, and it was agreed that the Fund would assist Islamabad in obtaining confirmation of its external financing needs.
However, according to sources, there are nine tables in the Memorandum of Economic and Financial Policies (MEFP) that must be completed with official figures, and one of these tables relates to Net International Reserves (NIR) as an indicative target that cannot be met without incorporating the external financing requirements of the programme period.
