Chinese bank rolls over $2.4bn loan to Pakistan

FOOLS_NIGHTMARE · Jul 27, 2023

Payments due in next two fiscal years, FinMin Dar says.
Pakistan to make interest payments "only in both years".
Foreign exchange reserves held by SBP stand at $8.7bn.

The Export-Import Bank of China (EXIM) has rolled over $2.4 billion to Pakistan, a sigh of relief for the outgoing Pakistan Democratic Movement-led government as it seeks to meet Pakistan's debt payments due next year.

In a tweet, Finance Minister Ishaq Dar said the bank has rolled over the amount for two years, which are due in the next two fiscal years — $1.2 billion in FY24 and the same amount in FY25.

https://twitter.com/x/status/1684429007985561600

"Pakistan will make interest payments only in both years," the finance minister, whose government's tenure will end in August, said.

The relief comes around a week after Prime Minister Shehbaz Sharif had announced that the same financial institution — Exim Bank of China — had rolled over $600 million to Pakistan.

This amount was in addition to the more than $5 billion in loans that Pakistan's iron-brother China had rolled over in the last three months, the prime minister had said.

The funds from friendly countries, including China, Saudi Arabia, and the UAE, have helped Pakistan avoid a sovereign default and secure a deal with the International Monetary Fund (IMF).

The IMF's board had approved a $3 billion Standby Arrangement for Pakistan on June 30, with $1.2 billion being released initially and the rest to be provided after two reviews.

Pakistan's foreign exchange reserves held by the central bank rose to the highest level in nine months at $8.7 billion as of July 14, thanks to financial support from the bilateral and multilateral partners.