Lagatar24 Desk
Islamabad, July 27: To help the cash-strapped nation shore up its foreign exchange reserves, China has extended a USD 2.4 billion loan to its all-weather partner Pakistan for two years, Finance Minister Ishaq Dar announced on Thursday.
Pakistan was expected to repay the debt over the course of the following two fiscal years, according to Dar’s tweet.
“Chinese EXIM Bank has rolled over for 2 years principal amounts of following loans totalling US$ 2.4 billion which are due in next 2 fiscal years: FY2023-24: US$1.2 billion FY2024-25: US$ 1.2 billion,” he said.
“Pakistan will make interest payments only in both years,” he added.
The news comes little over a week after Pakistan’s Prime Minister Shehbaz Sharif revealed that China has extended a USD 600 million loan to Pakistan in order to boost the country’s ailing economy.
As talks to secure the IMF rescue dragged on, China had also extended more than USD 5 billion in loans for Pakistan over the previous three months to help its important ally avoid a default.
Through the granting of fresh loans and the refinancing of current debt, China has frequently assisted Pakistan in meeting its financial obligations.
Beijing refinanced its USD 1.3 billion commercial loans early in June, which prevented Islamabad from going into default on its debt obligations during the time that the International Monetary Fund (IMF) programme was halted.
Pakistan managed to get a last-ditch USD 3 billion IMF bailout on June 30, which later disbursed a first upfront instalment of roughly USD 1.2 billion.
This was followed by additional financial help in the amount of USD 2 billion from Saudi Arabia and USD 1 billion from the UAE.
Since then, the reserves have steadied, and the central bank reported last week that they nearly doubled, going from USD 4.2 billion to USD 8.7 billion in the week ending July 14.
