After UAE, China Also Rollsover $2bn Loan to Pakistan

Thu Feb 29 2024
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ISLAMABAD: The Government of Pakistan gets another relief as China has rolled over a $2-billion loan to Pakistan, which would lessen the burden on Pakistan’s foreign reserves and other financial requirements. The development was confirmed by caretaker finance minister Shamshad Akhtar in a response to Reuters on Thursday.

According to the finance ministry, the $2-billion loan was due in March and has been further extended for one year. Media reports also mentioned that China had communicated about the rollover decision to Islamabad.

Pakistan’s economy is facing huge pressure and has already secured a $3-billion Stand-By Arrangement (SBA) from the International Monetary Fund (IMF) to get rid of the economic quagmire.

Rolls Over $2bn Loans to Pakistan

Meanwhile, in January 2024, the United Arab Emirates also rolled over a 2 billion dollar loan, which was due in the same month. After the decision, the Pakistani currency improved by over Rs5 during one and a half months.

Now, after the recent decision by China, the forex reserves being held by the State Bank of Pakistani (SBP) would witness an increase of up to $487mn, and the total reserves would stand at $4.3bn.

It is worth mentioning here that the new government’s first concern would be to address Pakistan’s economic concerns, including a fresh deal with the IMF and other bilateral and multilateral agreements, which would also require tough reforms in the country. The reforms are possible to lead to price hikes and inflation in the country in the coming months.

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