The whole world is aware of Pakistan's economic condition. To support its economy, china has assured to give pakistan a loan of 316604005000 rupees (3.7 billion dollars) next month. With this help from china, there is a possibility of a jump in Pakistan's foreign exchange reserves, which is currently 11.516 billion dollars.
Loan will be given in Yuan, not Dollar
However, according to media reports, china has decided to give this amount to pakistan in Chinese Yuan, not Dollar, like last time. This is because these days china is not trying to reduce the importance of dollar in its foreign exchange reserves, but is emphasizing on the use of other currencies. china wants to reduce its dependence on Dollar and Euro.
china is repeatedly helping Pakistan
According to media reports, earlier china had given a loan of $ 1.3 billion to pakistan at an interest rate of about 7.5 percent, which has been returned. This loan was paid by pakistan between march and april 2024. Apart from this, a syndicated loan of $ 2.1 billion from three Chinese banks, equivalent to 15 billion yuan, is also going to mature in June. These include china Development bank 9 billion yuan, bank of china 3 billion yuan and ICBC also 3 billion yuan.
Why is Chinese help necessary for Pakistan?
In a recent meeting, china has assured pakistan of refinancing the loans maturing between march and june 2025. This means replacing the old loan with a new loan.
Pakistan's foreign exchange reserves have increased after getting a loan of $ 1 billion from the international Monetary Fund (IMF) this month. pakistan needed China's financial help to maintain its foreign exchange reserves in double digits by the end of June. If china had not helped, Pakistan's forex reserves would have fallen below $10 billion..jpg)
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