Islamabad: Pakistan has received USD 1.6 billion as a credit line to correct its balance of payments crisis, according to a news report. This pool of foreign funds is expected to boost the fast-depleting foreign currency reserves in the country.
According to the State Bank of Pakistan (SBP), which has provided details of this news, The People’s Bank of China quotes the swap agreement with the SBP at PKR 351 billion, which has been extended. Both believe that the extension will facilitate bilateral trade and investment to help foster economic development in the two countries.
This agreement is valid for three years but can be further extended if both parties believe it to be important. Working on changing bilateral trade to yuan with China, Pakistan would be able to carry out trade through another currency.
By devising a loan mechanism for banks to start yuan financing, the SBP had allowed Industrial Commercial Bank of China (ICBC) Pakistan to start its operations in 2015. Thus, the groundwork for promoting bilateral trade and investment between the two countries has already been done.
