Pakistan to Request Extension on 30 Billion Yuan Currency Swap Line with China, Expects US Response on $10 Billion Facility, Says Finance Minister Muhammad Aurangzeb
ISLAMABAD: Pakistan will formally apply for extension of the 30 billion yuan currency swap with China, Federal Minister for Finance and Revenue Muhammad Aurangzeb said when announcing Pakistan’s full utilisation of the existing swap facility with Beijing.
In an exclusive interview with international news agency Reuters, Finance Minister Muhammad Aurangzeb said the decisions on the need to opt for extra funding on the existing swap line would be taken at a later stage. He pointed out Islamabad had also sought a $10 billion exchange stabilization facility from the United States, for which an official reply was expected in two months. The economic diplomacy of Pakistan is still active both in Washington and Beijing, where the US Export-Import Bank might be able to help finance Boeing planes for Pakistan International Airlines (PIA).
The risk of conflicts in the Middle East encompasses oil refineries.Oil refineries are covered by DFC Support for Oil Refineries and Middle East Conflict Risks.
The Finance Minister also shared that the US International Development Finance Corporation (DFC) may continue to offer financial aid for Pakistan’s $5 billion oil refinery upgradation program.
Aurangzeb made a statement of concern about energy markets in the world and stated that if there is an unchecked rise in oil prices, it will be a big hurdle for the local economy. He said if the ongoing Middle East conflict drags its feet to November or December it will be a negative risk for the 4 percent GDP growth target for Pakistan. But he said the country has enough petroleum reserves to easily satisfy its domestic demand until September and that supplies will be okay for October, while careful planning is already under way for November.
IMF Fourth Review and Resilience Facility
On international financial support, the Finance Minister assured the world that Pakistan had no immediate need for more loans or financial aid from the International Monetary Fund (IMF).
He said an IMF mission will be coming next week to undertake the four review of Pakistan’s $7 billion Extended Fund Facility (EFF) and also the third review of the Resilience and Sustainability Facility (RSF). Based on the quantitative performance measures, Aurangzeb felt that Pakistan is in a strong position and has adopted most of the structural benchmarks.