China defers $2b debt payment to Pakistan

ISLAMABAD: China has deferred the $2 billion debt payment to Pakistan for two years, ARY News reported citing sources. 

According to sources, China Eximbank has officially written to Pakistan about the delay in the recovery of debt.

Sources said that the federal government has revised the terms and conditions for the debt rollover. Pakistan is also exempted from paying additional interest on the loan, sources added.

Furthermore, Pakistan will repay the debt amount as per the agreement with China. All 31 loan agreements have been extended from the earlier deadline of July 21, 2023, to June 30, 2025, sources added.

Earlier, Prime Minister Shehbaz Sharif said that China has rolled over a $600 million loan to Pakistan, helping shore up the country’s foreign exchange reserves.

“Exim Bank of China rolled over $600 million to Pakistan, which increased our foreign currency reserves,” the premier said, adding that the assistance from friendly countries is improving economic indicators.