China rolls over $3.4 billion in loans to Pakistan, a move that, combined with recent commercial and multilateral inflows, is expected to raise the country’s foreign exchange reserves to $14 billion, according to a finance ministry official on Sunday.
Of this amount, $2.1 billion has remained in Pakistan’s central bank reserves over the past three years and has now been rolled over, while another $1.3 billion commercial loan, previously repaid by Islamabad two months ago, has also been refinanced by China.
In addition to the Chinese support, Pakistan has received another $1 billion from commercial banks in the Middle East and $500 million through multilateral financing channels, the official added.
The source noted that these inflows bring Pakistan’s reserves in line with targets set by the International Monetary Fund (IMF), which required reserves to exceed $14 billion by June 30, the end of the fiscal year.
The loans, particularly from China, play a crucial role in supporting Pakistan’s foreign reserves, which are essential to meeting IMF program requirements and maintaining financial stability.
Officials in Pakistan assert that the country’s economic situation has improved, crediting reforms carried out under the ongoing $7 billion IMF bailout program.
In March, China had already extended the maturity of a $2 billion loan by one year, a move also confirmed by Khurram Schehzad, an adviser to the finance minister, in comments to Reuters.
Rolling over a loan involves extending the repayment deadline of an existing loan instead of settling it fully upon maturity. This process typically includes renegotiating terms to allow continued use of funds while deferring full repayment.
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