Pakistan has repaid 700 million dollars to China this week under a commercial loan agreement. After this payment, the foreign exchange reserves held by the State Bank of Pakistan have decreased to 15.5 billion dollars.
According to official sources, the payment was made to the China Development Bank. This bank had earlier rolled over the same loan for a period of three years.
The repayment has now reduced Pakistan’s foreign currency reserves at a sensitive time for the economy.
Government sources also said that another one billion dollar loan from the China Development Bank will mature in June. The government is considering repaying this loan before the end of the current fiscal year. It hopes to refinance the amount under improved terms.
This development comes as a delegation from the International Monetary Fund is scheduled to visit Pakistan from February 25 to March 11. The IMF mission will review Pakistan’s economic performance. It will assess the country under the Extended Fund Facility program.
The review will consider approval of a one billion dollar loan tranche. It will also examine more than 200 million dollars in climate financing support.
The IMF team will spend the first three days in Karachi. Formal talks with the federal government will begin on March 2.
