China rolls over $2 billion loan, easing pressures on Pakistan

WEB DESK: In a noteworthy display of diplomatic goodwill during challenging times, China has agreed to roll over a $2 billion loan that was slated to mature in March.

This development brings a sigh of relief for Pakistan, grappling with a dwindling reserve, reported at $8.01 billion just last week.

Originally procured with a 7.1 per cent interest rate, the maturation of this loan would have exacerbated Pakistan’s already strained fiscal position.

The decision to extend the loan timeline emerges as a pivotal lifeline for maintaining economic stability in the nation.

The timely extension of the loan aligns with Pakistan’s anticipated significant fund inflows of $14 billion in the fiscal year 2024, a projection made in September 2023 as reported by Bloomberg.

This relief not only alleviates immediate pressure on the country’s reserves but also resonates with its broader strategy to enhance financial resilience, ensuring a steady influx of capital.

This diplomatic move by China not only underscores the amicable ties between the two nations but also fortifies Pakistan’s ongoing efforts to navigate economic challenges and bolster its financial standing on the global stage.

Read next: PSX closes with 0.77% gain