China rolls over $2.4 billion loan for 2 years: Pakistan finance minister

In a much-needed boost to itseconomy, cash-strapped Pakistan has secured crucial aid from its steadfast ally, China. On Thursday, Pakistan's finance minister, Ishaq Dar, announced that Beijing has agreed to roll over a significant $2.4 billion loan for a period of two years.

This move is expected to provide relief to Pakistan, which is facing an acute Balance of Paymentscrisis. Itscurrent reserves barely cover two months' worth of import bills.

"The Chinese Exim Bank has rolled over principal amounts totaling $2.4 billion, which were scheduled for payment in the next two fiscal years," Dar said through the messaging platform X, formerly known as Twitter.

The finance minister further revealed that Pakistan will only be required to pay interest on these loans for the next two years. This extension comes as a welcome respite, as previously, Pakistan hadtorepaythe loan amount cum interest by 2025.

Reuters quoted Prime Minister Shehbaz Sharif as saying that Pakistan’s long-term ally Beijing, which has pledged over $65 billion in infrastructure investment in Pakistan as part of the Belt and Road Initiative (BRI), has in recent months either rolled over or granted new loans worth around $5 billion to Islamabad as negotiations with the International Monetary Fund dragged on for eight months.

Furthermore,IMF's billion-dollar package also had a profound impact on Pakistan's foreign exchange reserves. A few weeks ago, these reserves had dwindled to $4 billion. However, following the infusion of funds through the IMF package, Pakistan's foreign reservessurged to $14 billion last week.

The last-ditch IMF accord, which came only with stringent fiscal discipline requirements, helped Pakistan avoid a sovereign default.

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