China staving off Pakistan crisis with US$1.2b loans
Chinese banks have twice come to the rescue as Pakistan faces a potential forex crisis
Rising imports and falling exports, as well as a drop in remittances from Pakistanis abroad, have brought Pakistan to the brink of a currency crisis, but Beijing banks have come to the rescue, reports the Financial Times.
The China Development Bank and the Industrial and Commercial Bank of China have each provided US$600 million in emergency loans.
But some experts see an eventual turn to the International Monetary Fund as inevitable. “Technically speaking we should have gone back to the IMF in January, but ministers are likely to try and wait until after the election [for parliament planned for 2018],” the Financial Times quoted Vaqar Ahmen of the Sustainable Development Policy Institute in Islamabad as saying.
“The IMF is a politically volatile issue in our country. If we go to the IMF to deal with our needs, that will send a very negative political signal and the opposition [parties] will use that against the government,” explained one Pakistani lawmaker.