Finance Minister Ishaq Dar said on Friday that the State Bank of Pakistan has received $500 million of a $1.3 billion financing facility from the Industrial and Commercial Bank of China Ltd (ICBC), helping shore up the cash-strapped country’s foreign exchange reserves.

In a mesage on Twitter late Friday evening, Dar said all formalities regarding the $1.3b financing has been completed and the Chinese bank has approved the rollover facility. 

He said the amount would be disbursed in three instalments, the first of which was already received by the central bank. 

Earlier in the day, the finance minister said the financing is crucial for the country’s economy, which is facing a balance of payment crisis, with foreign reserves held by the State Bank of Pakistan (SBP) dropping to levels barely able to cover three weeks of imports.

Pakistan has already received a $700 million loan from China Development Bank to help boost its forex reserves.

Dar said the total $2 billion is in effect Pakistan borrowing back the debt repayments it has paid to Beijing for previously agreed loans. 

Also read: China lends $700m to Pakistan in testing times

He said Pakistan will need $5 billion external financing to close its financing gap this fiscal year, which ends in June.

More external financing will be coming to Pakistan only after Islamabad signs a deal with International Monetary Fund (IMF), which the minister said should be done by next week.

The lender has been negotiating the deal with Pakistan since early last month to clear ninth review, which if approved by its board will issue over $1 billion tranche of $6.5 billion bailout agreed in 2019.

“We will, God willing, take this country out of this quagmire,” Dar said, dismissing concerns of a default risk.