Pakistan Overcomes Financial Crisis with $600M Rollover Loan from China, Boosting Reserves and Strengthening IMF Agreement.
China rolls over over $5B in loans for Pakistan, adds $600M more in recent deal. (Photo: ANI)
Cash-strapped Pakistan has successfully obtained a rollover of an additional USD 600 million loan from its longstanding ally, China. Prime Minister Shehbaz Sharif announced that the loan aims to strengthen the country’s foreign exchange reserves in conjunction with an IMF agreement.
This loan comes in addition to the more than USD 5 billion in loans that China has rolled over for Pakistan over the past three months, effectively preventing a default as negotiations for the IMF bailout persisted.
Pakistan secured a crucial USD 3 billion bailout from the International Monetary Fund on June 30, with an initial upfront payment of approximately USD 1.2 billion disbursed later.
The rollover loan from the Exim Bank of China has bolstered Pakistan’s foreign exchange reserves by USD 600 million. While appreciating the increase in reserves, Prime Minister Shehbaz Sharif expressed the country’s focus on generating income rather than relying solely on loans.
Alongside the IMF bailout and the Chinese loan, financial support of USD 2 billion from Saudi Arabia and USD 1 billion from the UAE, received after the IMF agreement, has contributed to stabilizing Pakistan’s economy. The State Bank of Pakistan reported a surplus of USD 334 million in the current account for June.