ISLAMABAD: China has rolled over a $2-billion loan to Pakistan, caretaker finance minister Shamshad Akhtar told British news agency Reuters on Thursday.
The $2-billion loan was due in March and has been extended for one year, Geo News which first reported the news said, citing sources in the Pakistan finance ministry.
Beijing had communicated the decision to Islamabad, it added.
The vulnerable external position means that securing financing from multilateral and bilateral partners will be one of the most urgent issues facing the next government, ratings agency Fitch said last week.
It said the close outcome of elections and resulting near-term political uncertainty may complicate the country’s efforts to secure a financing agreement with the IMF, to succeed the Stand-By Arrangement (SBA) expiring in March 2024.
“A new deal is key to the country’s credit profile, and we assume one will be achieved within a few months, but an extended negotiation or failure to secure it would increase external liquidity stress and raise the probability of default,” one of the top global rating agency said in a report.
Pakistan’s cash-strapped economy is struggling to stabilize from a financial crisis and secured a $3-billion Stand-By Arrangement (SBA) from the International Monetary Fund (IMF) last summer.
It is worth noting that the State Bank of Pakistan (SBP) had received $1 billion from China last June.
Pakistan’s vulnerable external position means that securing financing from multilateral and bilateral partners will be one of the most urgent issues facing the next government, ratings agency Fitch said last week.
