By Henny Sender
From the article:
ISLAMABAD -- The uncertainty of an election in Pakistan tends to give the markets a prolonged case of the jitters. As the country prepared to vote in 2013, the rupee fell sharply, leading Pakistan to turn to the People's Bank of China for help. After China transferred almost $600 million into the depleted coffers of the Pakistani central bank, the sell-off abated.
Fast forward five years to the eve of the national elections this summer, which ushered former cricket star Imran Khan into office. China stepped in once again, extending its currency swap agreement with Pakistan and raising its line of credit, and another pre-election sell-off of the rupee was halted.
"The swap was our secret weapon" in 2013, recalls the then-head of the State Bank of Pakistan, Yaseen Anwar. "I brought in so much money to shore up the defense of the rupee."
The pre-election interventions were reminders of China's status as Pakistan's top trading partner and "all-weather friend." But once the voting was finished, the dire realities of the Pakistani economy remained.
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Pakistan is "by far the largest country at high risk" of all 68 countries that are recipients of Chinese Belt and Road capital to have issues with sustainability of that debt, according to the Washington-based Center for Global Development. That could result in potential balance of payments issues and pressure on the rupee.
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