China has extended the maturity of $3.4 billion in loans to Pakistan, according to two senior Pakistani government officials who spoke to Reuters on Sunday.
This development is expected to strengthen Pakistan’s foreign exchange reserves, a key condition set by the International Monetary Fund (IMF).
The officials said that Beijing renewed a $2.1 billion deposit that has remained with the State Bank of Pakistan for the past three years and refinanced an additional $1.3 billion commercial loan that Pakistan had repaid two months earlier.
Both officials requested anonymity, citing a lack of authorization to speak publicly before an official statement is issued.
In addition to the Chinese support, Pakistan has also secured $1 billion from commercial banks in the Middle East and $500 million through multilateral financing, one of the officials added.
“These inflows have brought our reserves in line with the IMF’s target,” the official said.
The Chinese loans are particularly important in bolstering Pakistan’s critically low foreign exchange reserves, which the IMF mandated to exceed $14 billion by the close of the current fiscal year on June 30.
Pakistani officials maintain that the country’s economic position has stabilized as a result of ongoing structural reforms under the $7 billion IMF assistance program.
