Pakistan seeks extra 10 bln yuan on China swap line: finance minister

WASHINGTON: Pakistan has put in a request to China to augment its existing swap line by 10 billion yuan ($1.4 billion), Finance Minister Muhammad Aurangzeb said, adding he expected the country would launch a Panda bond before year-end.

Pakistan has an existing 30-billion-yuan swap line already, Aurangzeb told Reuters in an interview on the sidelines of the International Monetary Fund and World Bank Group spring meetings in Washington.

“From our perspective, getting to 40 billion renminbi would be a good place to move towards … we just put in that request,” Aurangzeb said.

China’s central bank has been promoting currency swap lines with a raft of emerging economies, including the likes of Argentina and Sri Lanka.

Pakistan has also made progress on issuing its first panda bond – debt issued on China’s domestic bond market, denominated in yuan. Talks with the presidents of the Asian Infrastructure Investment Bank (AIIB) and Asian Development Bank (ADB) – the two lenders who are in line to provide credit enhancements for the issue – had been constructive, he said.

“We want to diversify our lending base, and we have made some good progress around that – we are hoping that during this calendar year we can do an initial print,” he said.

Meanwhile, Aurangzeb expected the IMF executive board to sign off in early May on the Staff Level Agreement on its new $1.3 billion arrangement under a climate resilience loan program as well as the first review of the ongoing $7 billion bailout program.

Getting the green light from the IMF board would trigger a $1 billion payout under the programme, which the country secured in 2024 and has played a key role in stabilizing Pakistan’s economy.

Asked about the economic fallout from the tensions with India, Aurangzeb said it was not going to have much impact.

Trade flows between the two countries had already fallen off and totalled just $1.2 billion last year.

Aurangzeb estimated growth around 3% in the current financial year which ends in June 2025, and in the 4-5% range next year, with a view to hitting 6% thereafter.