China has renewed $3.4 billion in loans to Pakistan, according to two senior officials from the Pakistani government who communicated this information to Reuters on Sunday. This decision aims to alleviate pressure on foreign exchange reserves and strengthen Islamabad’s financial stability, aligning with the conditions set forth by the International Monetary Fund.
The sources said Beijing had rolled over a $2.1 billion facility that has been parked in the central bank of Pakistan since the last three years and also refinanced another small commercial loan of $1.3 billion that was repaid by Islamabad two months ago.
Also Read: Nike to Cut China Dependence For U.S.-Bound Products
The officials did not want their names to be mentioned because they lacked authority to speak publicly before an official statement could be declared.
They have also accepted another 1 billion dollars in the Middle East commercial banks and another 500 million dollars of multilateral financing according to one of the officials.
This takes our reserves to IMF target levels, he explained.
The loans, particularly Chinese ones, are vital in the buttressing of Pakistan’s low foreign reserves that the IMF demanded should be more than 14 billion dollars at the end of the current financial year on June 30.
According to Pakistani authorities, the country’s economy has stabilised amid ongoing reforms under a $7 billion IMF bailout.
