The government rejects reports of Pakistan approaching China, Russia, and Kazakhstan for loans. In a rebuttal statement, the Ministry of Economic Affairs (MEA) completely debased the reports of Pakistan taking foreign loans.
Earlier today, news reports emerged that PM Khan will ask for a $3 billion loan from China during his visit to Beijing for the Winter Olympics. The news report quoted government officials and claimed that Pakistan seeks to stabilize its dwindling foreign exchange reserves.
“A senior finance ministry official said the government was considering requesting China to approve another loan to the tune of $3 billion in China’s State Administration of Foreign Exchange, known as SAFE deposits,” the report noted.
Read more: Is PM Khan seeking $3b from China visit?
The Chinese money is part of Pakistan’s current official foreign exchange reserves recorded at $16.1 billion, the article further noted.
Later, more media reports emerged stating that Pakistan will also approach Kazakhstan and Russia for loans. According to the news reports, Kazakhstan and Russia will lend $2 billion to Pakistan. The reports also stated that the loans will be used for the ML-1 railway project.
Furthermore, the media said that the Economic Affairs Division (EAD) prepared a plan for obtaining US$ 5 billion new loans from China, Russia & Kazakhstan.
Pakistan plans to borrow $3 billion from China, $2 billion from Russia and Kazakhstan https://t.co/07zucDzcM1
— Roohan Ahmed (@Roohan_Ahmed) January 31, 2022
Govt issues rebuttal
The news took social media by storm as Pakistan only took a $3 billion loan from Saudi Arabia last year. Saudi Arabia deposited the amount for one year under a support package at a 4 percent interest rate.
Pertinent to mention, Pakistan’s foreign loans jumped to $9.43 billion in the first half of (July-December) of the fiscal year 2021-22. Pakistan recorded the overall amount of foreign borrowing at $9.432 billion in July to December period. This is in stark contrast to $5.67 billion in the corresponding period of the previous year. Therefore, the notion that Pakistan will further take loans did not sit well with the critics.
Read more: China’s debt trap diplomacy: A hoax?
Reacting to the news, the MEA issued an official rebuttal, shared on Twitter by Muzzammil Aslam, the spokesperson to the finance minister.
“This is to clarify that no such proposal is under process in the EAD for obtaining US$3 billion loans from China and US $2 billion loans from Russia and Kazakhstan,” the statement further added.
— Muzzammil Aslam (@MuzzammilAslam3) January 31, 2022