ISLAMABAD (Kashmir English): In a major relief for Pakistan’s economy, China has agreed to roll over $3.4 billion in commercial loans, helping the country maintain its foreign exchange reserves and stay on track with the International Monetary Fund (IMF) program.
The loans were originally set to mature between October 2024 and September 2027, but will now be rescheduled, allowing Pakistan to delay repayments and focus on economic stability. The announcement comes as part of broader financial cooperation between China and Pakistan, especially under the current IMF conditions.
Beijing rolled over $2.1 billion, which has been in Pakistan’s central bank’s reserves for the last three years, and refinanced another $1.3 billion commercial loan, which Islamabad had paid back two months ago.
Another $1 billion from Middle Eastern commercial banks and $500 million from multilateral financing have also been received.
The loans, especially the Chinese ones, are critical to shoring up Pakistan’s low foreign reserves, which the IMF required to be over $14 billion at the end of the current fiscal year on June 30.
This is not the first time China has supported Pakistan in difficult times. Last year, China rolled over another $2.4 billion and has consistently played a key role in helping Pakistan manage its financial obligations.
Pakistani authorities say that the country’s economy has stabilised through ongoing reforms under a $7 billion IMF bailout.
Meanwhile, the latest move by China will certainly boost the financial market and investors’ confidence in Pakistan.
