Pakistan has paid over Rs26 billion in interest cost to China for using a $4.5 billion Chinese trade finance facility to repay maturing debt in the last fiscal year – a cost that the country is bearing due to the failure of successive governments to place the economy on a solid footing.

The State Bank of Pakistan (SBP) released its annual financial statement for fiscal year 2020-21 that ended on June 30.

The report revealed that the central bank fully tapped the $4.5 billion, or 30 billion yuan, trade finance facility available under the China-Pakistan currency swap arrangement.

“During the year, the overall limit of 20 billion yuan has been further extended to 30 billion yuan for a period of three years against the rupee with the maturity buckets of three months to one year,” said the financial statement. “These purchases have been fully utilised as at June 30, 2021.”