China has allowed Pakistan for utilising its $1 billion deposited in the State Bank of Pakistan (SBP) for financing budgetary support, The News has learnt.

With this permission, the government would minimise at least Rs165 to Rs169 billion requirements for raising domestic debt from banking or non-banking institutions to finance its budget deficit. Beijing has provided $1 billion for deposit in the SBP in order to bridge the financing needs when Saudi Arabia had withdrawn its money. “China has come forward to bridge this gap. Beijing provided additional facility by allowing utilisation of $1 billion equivalent in rupee term for financing the budgetary requirements,” top official sources confirmed to The News here on Friday.

When the Ministry of Finance Spokesman was contacted for comments, he replied that Chinese deposits are public debt which means the Government of Pakistan receives Pak rupee equivalent to that amount.

Saudi Arabia, UAE and China helped Pakistan to manage its external account woes as the friendly countries had extended support in shape of rolling over their deposited money under three-year IMF programme. Pakistan’s financing sector requirements stood at $29.3 billion for the current fiscal year and because of stalled IMF programme it would be quite hard to manage external financing needs without any slippages.

https://www.thenews.com.pk/print/704267-budgetary-support-china-allows-pakistan-to-use-its-1-bn-sbp-deposit