China rolls over $3.4 billion of commercial loans to Pakistan

KARACHI: China has rolled over $3.4 billion in loans to Islamabad, which together with
other recent commercial and multilateral lending will boost Pakistan’s foreign exchange reserves to $14 billion, a finance ministry source said on Sunday.

Beijing rolled over $2.1 billion, which has been in Pakistan’s central bank’s reserves for the last three years, and refinanced another $1.3 billion commercial loan, which Islamabad had paid back two months ago, the source said.

Another $1 billion from Middle Eastern commercial banks and $500 million from multilateral financing have also been received, he said.

“This brings our reserves in line with the IMF target,” he said.

The loans, especially the Chinese ones, are critical to shoring up Pakistan’s low foreign reserves, which the IMF required to be over $14 billion at the end of the current fiscal year on June 30.

Pakistani authorities say that the country’s economy has stabilised through ongoing reforms under a $7 billion IMF bailout.

Meanwhile, the latest move by China will certainly boost the financial market and investors’ confidence in Pakistan.

Previously, China, the country’s top bilateral creditor, had extended the repayment period of a $2 billion loan to Pakistan by one year in March this year.

STELLAR KSE-100 OUTSHINES GOLD

The report comes as the KSE-100 Index delivered a stellar performance in FY25, surging by 58.6 per cent in the rupee terms (55.5 per cent in US dollars) to close at 124,379, up from 78,445 at the end of FY25.

This remarkable rally was driven by aggressive monetary easing, improved market liquidity, and the unlocking of fundamental value across key sectors.

At the same time, the FY25 also witnessed record market participation, with the highest-ever trading volumes and the highest traded value since FY21.

Moreover, Fitch Ratings upgraded Pakistan’s credit rating from CCC+ to B- following successful staff-level agreements with the IMF on the $7bn Extended Fund Facility and the $1.3bn Resilience and Sustainability Facility.

Interestingly, the KSE-100 exhibited a strong performance across all asset classes, boasting a FY25 return of 55.58 per cent, significantly outperforming Gold (47.56 per cent), T-Bills (12.68 per cent), DSC (12.61 per cent), Bank Deposits (12.60 per cent), PIBs (11.97 per cent), and US dollar/rupee (1.91 per cent).