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News18
3 days ago
- Business
- News18
Pakistan Gets $3.7 Billion Lifeline From China In Yuan
Last Updated: China has assured Pakistan of relending USD 3.7 billion in commercial loans, denominated in Chinese currency, before the end of June. China has assured Pakistan of re-lending USD 3.7 billion in commercial loans, denominated in Chinese currency, before the end of June, in a move that will help keep the foreign exchange reserves in double digits, according to a media report on Wednesday. Unlike in the past, when Beijing has given loans in non-Chinese currency too, this time Pakistan's strategic ally has decided not to give loans in the United States currency as part of its drive to decouple the economy from the dollar, the government sources told The Express Tribune newspaper. They said that China gave these assurances during recent meetings, aimed at securing the refinancing of loans maturing between March and June 2025. Pakistan has already returned a USD 1.3 billion loan of the Industrial and Commercial Bank of China (ICBC) in three tranches between March and April this year, officials said. Subject to some clarifications that the commercial bank has sought from Pakistan, it is expected that the ICBC would re-lend the money in Chinese currency in the next few days, said the government sources. The ICBC had given the loan two years ago at floating interest rates, which translated to around 7.5 per cent. The central bank's reserves remained around USD 11.4 billion after a USD 1 billion injection by the IMF this month. After the next Chinese refinancing, it may increase to USD 12.7 billion before seeing another dip from the middle of next month, said the sources. A USD 2.1 billion or 15 billion RMB syndicate financing loan by three Chinese commercial banks is maturing in June. Pakistan will pay at least three days ahead of the maturity to make sure that the money is given back before the close of the fiscal year. China would give this money in RMB currency, said the sources. The China Development Bank had given 9 billion RMB, Bank of China 3 billion RMB and ICBC 3 billion RMB. The loan is being extended for a period of three years, said the government sources. However, the interest rate issue was still undecided. Chinese authorities have given two options to Pakistan. It has proposed that Pakistan should either get the loan at a fixed interest rate or at a floating rate but that would not be based on Shanghai Interbank Offered Rate (Shibor), said the sources. The timely refinancing of this loan was critical for Pakistan to keep the reserves in the double digits by the end of June. Under the International Monetary Fund (IMF) programme, Pakistan has committed to increase the reserves close to USD 14 billion in this fiscal year. The Bank of China's USD 300 million loan will also mature next month, which Pakistan has to get refinanced to retain the reserves at their critical minimum levels. This loan too would be refinanced in Chinese currency, said the sources. The move to delink loans from the US dollar is not Pakistan specific rather it is part of the overall Chinese policy to decouple its economy from the US currency. Pakistan remains dependent on Beijing for remaining afloat, the friendly nation that is constantly rolling over the USD 4 billion cash deposits, USD 5.4 billion worth commercial loans and USD 4.3 billion trade financing facility. The recent IMF report stated that Pakistan's total foreign commercial loans as of December 2024 amounted to USD 6.2 billion, including USD 5.4 billion Chinese commercial loans. The rupee-dollar parity has largely remained stable in this fiscal year, albeit some depreciation during the past few days. The rupee-dollar parity closed at Rs 282.2 to a dollar on Tuesday. When contacted, Ministry of Finance spokesman Qumar Abbasi did not give an official version for the story. He had been requested to confirm whether China has agreed to refinance USD 1.3 billion ICBC loan paid in March-April and whether it will be refinanced in RMB currency. He also did not respond to a question whether China also agreed to refinance USD 2.1 billion equivalent CDB-led loan that Pakistan will pay in June. The IMF report underlined that Pakistan has received firm commitments for USD 1 billion financing in the next one year. It added that key bilateral partners remain committed to rolling over existing short-term liabilities in the remaining programme period. But the IMF said that access to external commercial financing is expected to remain limited during the programme period, with a small 'Panda" bond issuance anticipated in the next fiscal year. The IMF sees a gradual return to the Eurobond and global Sukuk market from fiscal year 2027, reflecting a restoration of policy credibility, according to the report. (This story has not been edited by News18 staff and is published from a syndicated news agency feed - PTI) Watch India Pakistan Breaking News on CNN News18. Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! tags : China pakistan Location : New Delhi, India, India First Published: May 29, 2025, 08:49 IST
Express Tribune
4 days ago
- Business
- Express Tribune
China assures of $3.7b refinancing next month
Foreign exchange reserves have started increasing on the back of recent loans by the AIIB, World Bank, and ADB. The reserves stand over $8.2 billion, and the IMF board is also expected to approve a $700 million tranche this Thursday. photo: file Listen to article China has assured Pakistan of relending $3.7 billion in commercial loans, denominated in Chinese currency, before the end of June, including $2.4 billion that is maturing next month, in a move that will help keep the foreign exchange reserves in double-digits. Unlike in the past, when Beijing has given loans in non-Chinese currency too, this time Pakistan's strategic ally has decided not to give loans in the United States currency as part of its drive to decouple the economy from the dollar; the government sources told The Express Tribune. They said that China gave these assurances during recent meetings, aimed at securing the refinancing of loans maturing between March and June 2025. Pakistan has already returned a $1.3 billion loan of the Industrial and Commercial Bank of China (ICBC) in three tranches between March and April this year, officials said. Subject to some clarifications that the commercial bank has sought from Pakistan, it is expected that the ICBC would relend the money in Chinese currency in the next few days, said the government sources. The ICBC had given the loan two years ago at floating interest rates, which translated to around 7.5%. The central bank's reserves remained around $11.4 billion after a $1 billion injection by the IMF this month. After the next Chinese refinancing, it may increase to $12.7 billion before seeing another dip from the middle of next month, said the sources. A $2.1 billion or 15 billion RMB syndicate financing loan by three Chinese commercial banks is maturing in June. Pakistan will pay at least three days ahead of the maturity to make sure that the money is given back before the close of the fiscal year. China would give this money in RMB currency, said the sources. The China Development Bank had given 9 billion RMB, Bank of China 3 billion RMB and ICBC 3 billion RMB. The loan is being extended for a period of three years, said the government sources. However, the interest rate issue was still undecided. Chinese authorities have given two options to Pakistan. It has proposed that Pakistan should either get the loan at a fixed interest rate or at a floating rate but that would not be based on Shanghai Interbank Offered Rate (Shibor), said the sources. The timely refinancing of this loan was critical for Pakistan to keep the reserves in the double digits by the end of June. Under the International Monetary Fund (IMF) programme, Pakistan has committed to increase the reserves close to $14 billion in this fiscal year. The Bank of China's $300 million loan will also mature next month, which Pakistan has to get refinanced to retain the reserves at their critical minimum levels. This loan too would be refinanced in Chinese currency, said the sources. The move to delink loans from the US dollar is not Pakistan specific rather it is part of the overall Chinese policy to decouple its economy from the US currency. Pakistan remains dependent on Beijing for remaining afloat, the friendly nation that is constantly rolling over the $4 billion cash deposits, $5.4 billion worth commercial loans and $4.3 billion trade financing facility. The recent IMF report stated that Pakistan's total foreign commercial loans as of December 2024 amounted to $6.2 billion, including $5.4 billion Chinese commercial loans. The rupee-dollar parity has largely remained stable in this fiscal year, albeit some depreciation during the past few days. The rupee-dollar parity closed at Rs282.2 to a dollar on Tuesday. When contacted, Ministry of Finance spokesman Qumar Abbasi did not give an official version for the story. He had been requested to confirm whether China has agreed to refinance $1.3 billion ICBC loan paid in March-April and whether it will be refinanced in RMB currency. He also did not respond to a question whether China also agreed to refinance $2.1 billion equivalent CDB-led loan that Pakistan will pay in June. The IMF report underlined that Pakistan has received firm commitments for $1 billion financing in the next one year. It added that key bilateral partners remain committed to rolling over existing short-term liabilities in the remaining programme period. But the IMF said that access to external commercial financing is expected to remain limited during the programme period, with a small "Panda" bond issuance anticipated in the next fiscal year. The IMF sees a gradual return to the Eurobond and global Sukuk market from fiscal year 2027, reflecting a restoration of policy credibility.
The Star
23-05-2025
- Business
- The Star
Bank of China marks 10 years as RMB clearing bank in Zambia
LUSAKA, May 23 (Xinhua) -- The Bank of China (BoC) on Friday celebrated a decade of operating as a renminbi (RMB) clearing bank in Zambia, reaffirming its commitment to promoting cross-border financial services across East and Central Africa. The ceremony in Lusaka, Zambia's capital, drew officials from the Chinese bank, the Chinese Embassy, and the Zambian government, as well as corporate clients. Jin Jun, counselor of the Chinese Embassy in Zambia, hailed the bank's role in advancing RMB internationalization and facilitating bilateral trade and investment. "It is reported that RMB cross-border settlements between Chinese and Zambian enterprises have been steadily increasing, with some companies already institutionalizing RMB settlements in bilateral transactions," he said. He called for broader RMB adoption to enhance local financial stability, improve corporate efficiency, and reduce exchange rate risks. The RMB, he added, offers a viable alternative for Africa's foreign exchange diversification as the world's fourth most used payment currency. Li Xuewen, managing director of BoC Zambia, said that the bank has actively promoted RMB services in Zambia throughout its nearly 30 years of operation in the country. He pledged to leverage BoC's global platform to support Zambian businesses entering the Chinese market and to facilitate Chinese investment in Zambia. Lillian Bwalya, permanent secretary in Zambia's Ministry of Commerce, Trade, and Industry, said the use of national currencies in cross-border trade would lower transaction costs, mitigate exchange rate risks, and foster a more stable business environment. This approach can safeguard trade even during global instability, she said, citing the RMB's convenience and role in cushioning financial risks. Lyness Mambo, director of the prudential supervision department at the Bank of Zambia, stated BoC's efforts had strengthened the local financial market and bolstered China-Zambia trade ties, noting that growing RMB usage could increase liquidity in Zambia's forex market, lower exchange costs for businesses, and reduce dependence on other currencies.
Business Times
22-05-2025
- Business
- Business Times
Former central bank deputy governor to head Bank of China: sources
[BEIJING] China will appoint financial veteran Liu Guiping as chairman of Bank of China (BOC), the nation's fourth-largest state-owned bank, two sources with knowledge of the matter said. Liu, who currently serves as executive vice-mayor of Tianjin city, will replace current chairman Ge Haijiao, who will move to become governor of China's northern Shanxi province, said the sources, who declined to be named as they are not authorised to speak to the media. The appointments will be announced as soon as this week, the sources said. The Tianjin municipal government, Shanxi provincial government, and BOC did not immediately reply to Reuters' request for comment. Liu, 59, has held several prominent positions in China's financial sector, including deputy governor of the People's Bank of China from November 2020 to April 2022 and president of state lender China Construction Bank from March 2019 to November 2020. He was executive vice-president at sovereign investor China Investment Corp from 2014 to 2016. Before that, Liu spent his career at major state lender Agricultural Bank of China for more than two decades. Ge will succeed Jin Xiangjun, who was placed under investigation in April by China's anti-graft organ on suspicion of serious violation of law and discipline, according to the website of the Central Commission for Discipline Inspection. Chinese President Xi Jinping has cracked down on corruption involving party members, saying in January that it is the biggest threat to China's Communist Party. REUTERS
Business Times
22-05-2025
- Business
- Business Times
Former PBOC deputy governor Liu Guiping to head Bank of China: sources
[BEIJING] China will appoint financial veteran Liu Guiping as chairman of Bank of China, the nation's fourth largest state-owned bank, two sources with knowledge of the matter said. Liu, who currently serves as executive vice-mayor of Tianjin city, will replace current chairman Ge Haijiao, who will move to become governor of China's northern Shanxi province, said the sources, who declined to be named as they're not authorised to speak to the media. The appointments will be announced as soon as this week, the sources said. The Tianjin municipal government, Shanxi provincial government, and Bank of China did not immediately reply to Reuters' request for comment. Liu, 59, has held several prominent positions in China's financial sector, including deputy governor of the People's Bank of China from November 2020 to April 2022 and president of state lender China Construction Bank from March 2019 to November 2020. He was executive vice-president at sovereign investor China Investment Corp from 2014 to 2016. Before that, Liu spent his career at major state lender Agricultural Bank of China for more than two decades. Ge will succeed Jin Xiangjun, who was placed under investigation in April by China's anti-graft organ on suspicion of serious violation of law and discipline, according to the website of the Central Commission for Discipline Inspection. Chinese President Xi Jinping has cracked down on corruption involving party members, saying in January that it is the biggest threat to China's Communist Party. REUTERS
