Pakistan's Finance Minister Muhammad Aurangzeb announced the intention to increase the credit line with China, attributed to the country's financial difficulties.
Request for Credit Line Increase
Pakistan has asked China for an additional 10 billion yuan—around $1.4 billion—on top of its current 30 billion yuan currency swap. Muhammad Aurangzeb emphasized the importance of this request to stabilize access to foreign currencies and bolster financial reserves.
Launch of the First Panda Bond
The Minister also mentioned the imminent launch of its first-ever Panda bond, which will be issued in China’s domestic market and denominated in yuan. Discussions with the heads of the Asian Infrastructure Investment Bank (AIIB) and Asian Development Bank (ADB) regarding credit enhancements for the bond issuance have also been deemed constructive.
Economic Forecasts and International Relations
Muhammad noted that the IMF executive board is expected to approve a new $1.3 billion deal under a climate resilience loan program in early May, which is a vital step for the country's financial planning. Regarding foreign relations, he highlighted that escalating tensions with India negatively impact the economic outlook.
Increasing the credit line and launching the Panda bond are strategic steps for Pakistan toward economic stabilization and diversifying financing sources.
