The EXIM Bank of China has agreed to roll over its loan of $2.4 billion with Pakistan for a duration of two years, as announced by Finance Minister Ishaq Dar on his Twitter account. The loan rollover is aimed at strengthening Islamabad’s foreign reserves and providing financial support to the country.
The rolled-over loan includes $1.2 billion that was originally due in the fiscal year 2023-24 and another $1.2 billion due in the fiscal year 2024-25. Pakistan will only be required to make interest payments during these two years.
Earlier, sources had indicated that China had deferred the $2 billion debt payment to Pakistan for a period of two years. The formal communication from China Exim bank confirmed the postponement of the debt recovery. Additionally, the federal government has renegotiated the terms and conditions for the debt rollover, granting Pakistan exemption from paying any additional interest on the loan.
This move by the EXIM Bank of China provides a significant boost to Pakistan’s economic stability by easing immediate repayment pressures and providing a breathing space for the country’s foreign reserves. It reflects the strong bilateral relations between China and Pakistan and China’s commitment to supporting Pakistan’s economic development.