China rolls over $2 billion loan to Pakistan, says finance minister

China has rolled over a $2 billion loan to Pakistan, caretaker finance minister Shamshad Akhtar confirmed on Thursday.

The $2 billion loan was due in March and has been extended for one year. Beijing had communicated the decision to Islamabad, sources say.

Pakistan’s cash-strapped economy is struggling to stabilise from a financial crisis and secured a $3 billion standby arrangement from the International Monetary Fund last summer.

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.

The development comes a month after Caretaker Prime Minister Anwaar-ul-Haq Kakar in a letter penned to his Chinese counterpart, requested a rollover of a $2bln loan for a year.

Kakar’s letter also appreciated the steps of the Chinese government in helping Pakistan ease the burden of foreign payments.

It is to be noted that Pakistan acquired safe deposits of $4 billion from China to address the balance of payments issue.

On January 17, the United Arab Emirates (UAE) rolled over $2 billion for one year to Pakistan.

The development came after Islamabad ‘requested’ the United Arab Emirates (UAE) for the rollover of $2 billion loan, which was getting mature in the current month of January.

Caretaker Prime Minister Anwaar-ul-Haq Kakar penned a letter to the UAE President Sheikh Mohammed bin Zayed al-Nahyan, seeking rollover of the loan.