ISLAMABAD: Pakistan is set to secure $3.3 billion in loans from Chinese banks in the coming days.
Senior government officials confirmed that discussions with Chinese authorities are in advanced stages, with two separate loan agreements expected to be finalised by the end of June 2025.
“A syndicated financing deal worth $2 billion is being arranged through a consortium of Chinese banks, with a maturity period of three years,” officials said.
The second component of the financing—valued at $1.3 billion—will be a refinancing arrangement with the Industrial and Commercial Bank of China (ICBC), covering a commercial loan that Pakistan had repaid earlier this year.
If finalised before the fiscal year ends on June 30, the inflows could raise Pakistan’s foreign exchange reserves—held by the State Bank of Pakistan (SBP)—beyond the $14 billion mark. As of June 13, 2025, SBP reserves stood at $11.7 billion.
In rupee terms, the injection would amount to around Rs924 billion, enabling the government to retire maturing short-term domestic debt in early July 2025.
While the reserves may touch $15 billion briefly, officials estimate that after accounting for scheduled outflows, SBP reserves could settle at over $14.5 billion by the end of June.
When asked whether the loans would be disbursed in Chinese yuan (RMB) instead of U.S. dollars, Ministry of Finance spokesperson Qamar Abbasi did not respond before publication.
Meanwhile, rising geopolitical tensions in the Middle East have led to a spike in global oil prices, driven by concerns over a possible blockade of the Strait of Hormuz amid escalating conflict between Iran and Israel. The strait accounts for nearly 20% of global oil supply, and any disruption could have far-reaching economic consequences.
