ISLAMABAD: China has rolled over $3.4 billion in loans to Pakistan, helping the country meet a key requirement of the International Monetary Fund (IMF) and stabilise its foreign exchange reserves.
According to media reports in the finance ministry, Beijing extended the repayment of $2.1 billion already held in Pakistan’s central bank for the past three years. Additionally, it refinanced a $1.3 billion commercial loan that Islamabad had returned two months ago.
The official also confirmed that Pakistan recently received another $1 billion from Middle Eastern commercial banks and $500 million in multilateral financing. These inflows are expected to push Pakistan’s reserves to around $14 billion—matching the IMF’s target for the fiscal year ending June 30.
“These inflows bring our reserves in line with the IMF target,” the source said.
The Chinese loans, in particular, have been critical for Pakistan’s financial stability. On March 9, China had also extended the repayment deadline of another $2 billion loan by one year.
Officials say the country’s economy has begun to stabilise as a result of ongoing reforms under the $7 billion IMF bailout programme.
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Currently, over 90% of Pakistan’s external debt is owed to multilateral and bilateral lenders, along with international bonds. Among bilateral lenders, China remains Pakistan’s largest creditor.
Meanwhile, the State Bank of Pakistan (SBP) reported a $2.66 billion drop in its foreign exchange reserves during the week ending June 20, bringing them down to $9.06 billion before the recent inflows.
