Finance Minister Miftah Ismail on Wednesday said a consortium of Chinese banks has signed a $2.3 billion loan facility with Pakistan. The development comes as the South Asian economy battles a widening current account deficit and dwindling foreign exchange reserves.

“The Chinese consortium of banks has today signed the RMB 15 billion (~$2.3 billion) loan facility agreement after it was signed by the Pakistani side yesterday,” said Miftah in a tweet.

The finance minister said that the inflow is expected within a couple of days. “We thank the Chinese government for facilitating this transaction,” he added.

Earlier this month, Miftah had announced that the the terms and conditions of the refinancing agreement had been reached but some “routine approvals from both sides” were pending.

At the time he had said the deal would “help shore up our foreign exchange reserves.”

Pakistan is facing an unfavourable economic situation as it remains engaged in talks with the International Monetary Fund (IMF) over revival of a stalled Extended Fund Facility.

Pakistan and the IMF on Tuesday night made progress on the budget measures for 2022-23, with additional policy actions committed by Islamabad to revive the stalled Extended Fund Facility (EFF) including generating Rs436 billion more taxes and increasing petroleum levy from July 1.

“Discussions between the IMF staff and the authorities on policies to strengthen macroeconomic stability in the coming year continue,” IMF Resident Representative in Pakistan Esther Perez Ruiz told Business Recorder.

“Important progress has been made over the FY23 budget.”