China rolls over $3.4 billion loans to Pakistan, say sources
KARACHI, Pakistan - China has rolled over $3.4 billion in loans to Pakistan, two senior Pakistani government officials told Reuters on Sunday, in a move that will help boost Islamabad's foreign exchange reserves, a requirement of the International Monetary Fund.
Beijing rolled over $2.1 billion, which has been in Pakistan's central bank's reserves for the last three years, and refinanced another $1.3 billion commercial loan, which Islamabad had paid back two months ago, the sources said.
The officials asked not to be named as they were not authorised to discuss the matter publicly ahead of an official announcement.
Another $1 billion from Middle Eastern commercial banks and $500 million from multilateral financing have also been received, one of the officials said.
"This brings our reserves in line with the IMF target," he said.
The loans, especially those from China, are critical to shoring up Pakistan's low foreign reserves, which the IMF required to be over $14 billion at the end of the current fiscal year on June 30.
Pakistani authorities say that the country's economy has stabilised through ongoing reforms under a $7 billion IMF bailout. REUTERS
Join ST's Telegram channel and get the latest breaking news delivered to you.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
35 minutes ago
- Straits Times
China's envoy urges Australia to resist US pressure on military spending
Chinese ambassador Xiao Qian said both Australia and China rely on the same trade routes and have a major stake in safeguarding maritime security. PHOTO: AFP CANBERRA – China's envoy to Canberra urged Australia not to be 'incited' by Nato's support for US demands to sharply raise defence spending and instead cooperate with Beijing to resolve regional disputes. Ambassador Xiao Qian, in an opinion article published in The Australian newspaper on June 30, wrote that both Australia and China rely on the same trade routes and have a major stake in safeguarding maritime security. He emphasised their roles as key trade partners with 'highly complementary' economies. 'Dramatically increasing military spending places a heavy fiscal burden on the countries involved, undermining their efforts to boost economies and improve livelihoods, and further straining a global economy already struggling with weak recovery,' Mr Xiao said. He added some countries at events such as the Group of Seven summit and the recent North Atlantic Treaty Organisation meeting have 'hyped up the so-called China threat narrative,' to increase defence spending 'and even incited Australia to follow suit.' Australia spends a little over 2 per cent of its gross domestic product on defence, and is under pressure from the US to raise that to 3.5 per cent. The centre-left government has pushed back, pointing out it has already increased outlays. At a higher level, Canberra is trying to balance the increasingly confrontational relationship between the US and China, which are respectively Australia's historic security ally and its biggest trading partner. Australia likely wants to avoid raising defence spending excessively and antagonising Beijing. 'As I often hear from Australian friends, 'we have hundreds of reasons to be friends, and none to be enemies',' Mr Xiao said. Nato leaders last week agreed to increase defence spending to 5 per cent of GDP and renewed their 'ironclad commitment' to mutual security as they aim to push back against an increasingly belligerent Russia. The US wants allies to take up more of the fiscal burden for their own defence so it can focus more heavily on China. Australia's Labor government has managed to rebuild ties with Beijing after they plunged into a deep freeze, which included punitive trade actions against some Australian goods in 2020. The fallout was triggered by the then centre-right government calling for a probe into the origins of Covid-19. 'China and Australia are friends, not foes. This should never have been in question,' Mr Xiao said. 'China has been always developing bilateral friendship and co-operation with the utmost sincerity and patience, and we hope Australia will work with us in the same direction.' BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
an hour ago
- Business Times
Japan auto trade ‘unfair', could buy more US oil, Trump tells Fox News
JAPAN engages in 'unfair' automobile trade with the United States and should increase its imports of US energy resources and other goods to help reduce the US trade deficit, President Donald Trump said in an interview broadcast on Sunday. Tokyo is scrambling to find ways to get Washington to exempt Japan's automakers from 25 per cent automobile industry-specific tariffs, which are hurting the country's manufacturing sector. Japan also faces a 24 per cent so-called reciprocal tariff rate starting on July 9 unless it can negotiate a deal. 'They won't take our cars, and yet we take millions and millions of their cars into the United States. It's not fair, and I explained that to Japan, and they understand it,' Trump said in an interview on Fox News' Sunday Morning Futures with Maria Bartiromo. 'And we have a big deficit with Japan, and they understand that too. Now we have oil. They could take a lot of oil, they could take a lot of other things.' The automobile sector accounted for about 28 per cent of the total 21 trillion yen (S$185 billion) worth of goods Japan exported to the US last year. REUTERS
Business Times
an hour ago
- Business Times
Asian banks fuel more than US$2 billion loan boom in Middle East
[HONG KONG] Middle East borrowers are ramping up loans that are being syndicated in Asia-Pacific as they look to diversify fundraising beyond global bond and domestic markets. More than US$2 billion of Middle East deals targeting Asian bank liquidity have launched in recent weeks, including Saudi Electricity's US$1 billion loan, Banque Saudi Fransi's US$750 million facility and a US$500 million financing for Al Ahli Bank of Kuwait. The growing need for Middle East borrowers, primarily those from the Gulf States, to look beyond domestic capital markets comes as many regional economies press ahead with expensive diversification plans, in an environment where low oil prices are seen as challenging growth and finances. Saudi Arabia is running a fiscal deficit, with oil prices being far below the level of US$92 a barrel, the International Monetary Fund says it needs to balance its budget. That's led to the government and Saudi companies ramping up borrowing to fund Crown Prince Mohammed bin Salman's US$2 trillion transformation programme. Meanwhile, Qatar, Kuwait and the United Arab Emirates are among others that have agendas that will require heavy investment over several years to diversify revenues away from traditional energy sources. 'Middle Eastern borrowers, given the significant borrowing requirements, have been much more open to diversifying their lending relationships and willing to tap into the demand from Asia,' said Amit Lakhwani, global head of loan syndicate at Standard Chartered. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Asia also offers opportunities to borrow in new currencies or tenors versus what is available to them in the Middle East market, he added. The volume of loans raised by Middle East borrowers in Asia-Pacific touched a six-year high of US$5.2 billion in 2024, according to Bloomberg-compiled data. The flurry of recent deals also follow the closing of Qatar National Bank's US$2 billion borrowing in March that drew nearly 30 lenders, largely comprising Chinese, Japanese and Taiwanese banks, the data showed. Such deals have historically done well in Asia. There's a huge demand from Asian banks to join the loans of Middle Eastern borrowers, given the dearth of transactions back home. The volume of syndicated facilities – denominated in the US dollar, euro and Japanese yen – slumped 30 per cent to US$53 billion so far this year in Asia-Pacific ex-Japan, according to Bloomberg-compiled data. That's the lowest tally in at least a decade. Moreover, not only do companies from the Middle East often have better credit ratings, but such deals are able to offer higher returns versus similarly-rated Asian entities, said Aaron Chow, managing director for loan capital markets, Asia-Pacific at Sumitomo Mitsui Banking. The recent five-year loan of Saudi Electricity, which is rated A+ by Fitch, pays an interest margin of around 85 basis points over the benchmark Secured Overnight Financing Rate. In contrast, the recent nearly five-year borrowing of South Korea's Shinhan Card, which is rated A by Fitch, offers a margin of 80 basis points over SOFR. Still, some of these deals could experience some headwinds given that banks have internal limits on how much capital can be deployed into a specific country and sector. BLOOMBERG
