Ishaq Dar, the finance minister of Pakistan said on Thursday that China has rolled over the loan of $2.4 billion for the Islamic nation for two years, a loan that could help Islamabad to overcome the economic crisis.
The externsion in loan maturities by China could boost Pakistan’s foreign exchange reserves which are enough to pay the import bill for two more months.
Ishaq Dar, Pakistan’s FM, said through the X platform that the Chinese EXIM Bank rolled over a $2.4 billion loan for two years, which Pakistan has to pay back in 2024 and 2025.
Beijing is a longtime friend of Islamabad and played a crucial role in helping Pakistan to avoid a default, but there has been question about how can cash-strapped country would repay the Chinese loan. While some Pakistani analysts call it a debt trap, the government says there is no truth to these speculations.
The development comes two weeks after the International Monetary Fund (IMF) transferred the first installment of $1.2 billion to the central bank of Pakistan so Pakistan could avoid default.
Last week Pakistan’s foreign exchange reserves bounced to $14 billion.
Pakistan said that in recent months China rolled over the loan of $5 billion.
China is bankrolling the China-Pakistna Economic Corridor (CPEC), a package that includes a group of mega projects.
The package, in which China invest billions of dollars in Pakistan, is considered as the lifeline of the country, which had stumbled until June to overcome the economic crisis.
