• China lends $2 billion loan to cash-strapped Pakistan

    International
    China lends $2 billion loan to cash-strapped Pakistan

    Pakistan's finance minister, Ishaq Dar, announced on Friday that China had extended a $2 billion loan that matured last week giving relief during the South...


    Digital Desk: Pakistan's finance minister, Ishaq Dar, announced on Friday that China had extended a $2 billion loan that matured last week, giving relief during the South Asian nation's acute balance of payments crisis.


    Locking in a rollover was crucial for Pakistan, where reserves have declined to just four weeks' worth of imports, and negotiations over an IMF bailout tranche of $1.1 billion have stalled.


    "I am pleased to confirm that this was rolled over on March 23," Dar said in parliament, alluding to the maturity date. He claimed that all the necessary paperwork had been completed.


    Neither the Beijing government nor the Chinese central bank replied to queries for comment on the rollover.


    Dar's remarks were the first formal announcement of the loan rollover following its maturity. However, Dar did not provide the revised maturity date or any other details about the agreement.


    A high-ranking official of the finance ministry said to Reuters on Wednesday that the restructuring would be formally confirmed after the procedure was finished.


    Since early February, Islamabad has been negotiating with the IMF for the release of $1.1 billion from a $6.5 billion bailout plan agreed in 2019.


    One of the IMF's conditions for releasing the tranche is the assurance of external funding to support Pakistan's balance of payments.


    So far, Beijing has been the only source of support for Islamabad, with a refinancing of $1.8 billion given to Pakistan's central bank last month.