The federal government refuted on Monday reports of a proposal to solicit loans amounting to $5 billion from China, Russia and Kazakhstan.

According to a statement issued by the Economic Affairs Division, “no such proposal is under process … for obtaining US$ 3 billion loan from China and US$ 2 billion loan from Russia & Kazakhstan.”

The same was also tweeted by Muzzamil Aslam, who is the adviser to the finance minister.

Earlier, media reports had quoted sources from EAD as saying that the $3 billion loan from China would be used to stabilise foreign exchange reserves, while $1 billion each from Russia and Kazakhstan would be used for the ML1 Railway Project.

"Pakistan has set its sight on a loan to the tune of $3 billion from China to stabilise its dwindling foreign exchange reserves and also seeks an investment bonanza in half a dozen sectors during the visit of Prime Minister Imran Khan to Beijing next week," The Express Tribune reported on Sunday.

The report, by business journalist Shahbaz Rana, quoted a senior finance ministry official as saying that the government was considering to request the loan in China's Safe Administration of Foreign Exchange, known as SAFE deposits.

It added that China has already placed around $11 billion with Pakistan in the shape of commercial loans and foreign exchange reserves support initiatives, including $4 billion in SAFE deposits.

According to the report, the Chinese money is part of Pakistan’s current official foreign exchange reserves recorded at $16.1 billion.

In December last year, the federal finance ministry in a written response to the National Assembly said the Pakistan Tehreek-e-Insaf (PTI) government has contracted $37.85 billion foreign loans in three years.

The Ministry of Finance had submitted a written reply to the National Assembly regarding the foreign loans taken by the government.

It is pertinent to mention that Pakistan’s foreign loans jumped to $9.43 billion in the first half of (July-December) of the fiscal year 2021-22.