China rollsover $2.4b loan for two years: Dar

ISLAMABAD: Finance Minister Ishaq Dar said on Thursday that China has rolled over a $2.4 billion loan to Islamabad for a period of two years, a boost to the country’s economy as it tries to build its foreign reserves after clinching a deal with the International Monetary Fund (IMF).

“Chinese Exim bank rolled over principal amounts totaling $2.4b which are due in [the] next two fiscal years,” he said in a 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

Pakistan will make interest payments only in both years.

— Ishaq Dar (@MIshaqDar50) July 27, 2023

Pakistan will make interest payments only over the next two years, Dar said.

The development comes a little over a week after Prime Minister Shehbaz Sharif announced that China had rolled over a $600 million loan to Pakistan, helping shore up the country’s foreign exchange reserves.

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This was in addition to over $5b in loans that longtime ally China had rolled over for Pakistan in the last three months, according to the premier, helping Pakistan avert a default as negotiations to secure the IMF bailout dragged on.

READ: China’s USD600 million rollover further boosts reserves

Pakistan secured a last gasp $3b IMF bailout on June 30, which later disbursed an initial upfront instalment of about $1.2b. This was followed by a further $2b of financial support from Saudi Arabia and $1b from the UAE.

The central bank said last week that foreign exchange reserves almost doubled, rising $4.2b to $8.7b during the week ending July 14.

Web Desk