Islamabad: In a significant development, China has agreed to roll over a $2 billion debt to Pakistan, according to sources from the Ministry of Finance. The loan, which was borrowed by Pakistan at a 7.1% interest rate, was maturing in the week of March. The rollover of this debt will assist in shoring up Pakistan’s depleting foreign reserves, which currently stand at $8 billion.
Last month, the caretaker Prime Minister Anwaar-ul-Haq Kakar wrote a letter to his Chinese counterpart Li Qiang, seeking the rollover of the $2 billion loan for a year. The letter expressed gratitude to China for its financial support and highlighted the challenging economic situation faced by Pakistan.
This move comes as part of China’s ongoing support for Pakistan’s economic stability. In May of the previous year, Beijing had already come to Pakistan’s aid by rolling over more than $2 billion in debt, helping the country meet crucial pending loan payments. China’s commitment to providing financial support has been reiterated on various occasions, emphasizing the strong economic ties between the two nations.
The rollover of this debt is expected to ease Pakistan’s external payment burden and contribute to stabilizing its economic situation. China’s consistent support has played a crucial role in helping Pakistan navigate financial challenges and maintain its fiscal resilience.
Digital Content Associate | Research Analyst | Research Writer | Project Management and M&E Expert
