Pakistan’s $2.4 billion loan from the Export-Import Bank of China (EXIM) was announced by Finance Minister Ishaq Dar on Thursday.
The departing government, which is led by the Pakistan Democratic Movement, can now breathe a sigh of relief as it works to make Pakistan’s debt payments, which are due in a year.
Ishaq Dar Confirmed EXIM Bank of China Loans Rollover
Ishaq Dar said in a tweet that the bank had postponed the payment for two years; the $1.2 billion in FY24 and the same amount in FY25 are due in the following two fiscal years.
Chinese EXIM Bank has rolled over for 2 years principal amounts of following loans totalling US$ 2.4 billion which are due in next 2 fiscal years:
FY2023-24: US$1.2 billion
FY2024-25: US$ 1.2 billionPakistan will make interest payments only in both years.
— Ishaq Dar (@MIshaqDar50) July 27, 2023
“Pakistan will make interest payments only in both years,” the finance minister, whose government’s tenure will end in August, said.
The announcement that the same financial institution, Exim Bank of China, had rolled over $600 million to Pakistan was made by Prime Minister Shehbaz Sharif about a week prior.
The prime minister had stated that this sum was in addition to the more than $5 billion in loans that China, Pakistan’s iron-brother, has renewed over the previous three months.
Pakistan was able to escape a sovereign default and reach an agreement with the International Monetary Fund (IMF) thanks to financial assistance from friendly nations including China, Saudi Arabia, and the UAE.
On June 30, the IMF’s board had approved a $3 billion Standby Arrangement for Pakistan, of which $1.2 billion would be made available right away and the other $2 billion would be given after two reviews.
As of July 14, Pakistan’s central bank held $8.7 billion in foreign exchange reserves, which was the highest level in nine months. This increase was made possible by financial assistance from bilateral and multilateral partners.
To read our blog on “China rollover $1 billion SAFE deposits to Pakistan,” click here.