Pakistan’s all-weather ally China has approved a loan of $700 million and the funds will be transferred to the central bank this week, finance minister Ishaq Dar announced on Wednesday as the cash-strapped country tried to avert a financial crisis.

The announcement by Dar on the loan by the Board of China Development Bank (CDB) came a day after Pakistan’s National Assembly unanimously passed a money bill aimed at raising tax revenues to fulfil the demands set by the IMF for seeking a $1.1 billion loan facility to avoid an economic meltdown.

Dar said all formalities have been completed with CDB and the funds would be transferred to the State Bank of Pakistan. “Formalities have been completed and the Board of China Development Bank has approved the facility of $700 million for Pakistan. This amount is expected to be received this week by the State Bank of Pakistan which will shore up its forex reserves!” Dar tweeted.

Pakistan has a chronic balance of payments problem which worsened last year, with the country’s forex reserves declining to critical levels. As of February 10, the central bank had only $3.2 billion in reserves, enough to cover barely three weeks of imports.

To stem dollar outflows, the government has imposed restrictions, allowing imports of only essential food items and medicines until a bailout is agreed upon with the IMF, which is seen as essential for the country to stave off default. Pakistan has already fulfilled demands of the IMF including raising an additional Rs 170 billion in revenues by June before releasing crucial $1.1 billion out of an already agreed $7 billion loan programme.

The country needed about $10 to $12 billion by June to pay back loans and meet the current account deficit. The government headed by Prime Minister Shehbaz Sharif has decided to implement measures to cut down on its expenditures by increasing taxes on the public and bringing down government expenses.