Pakistan awaits China's decision on rollover of $2 billion loan

A Pakistani security guard sits outside the currency exchange shop in Lahore on January 3, 2018. (AFP/File)
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Updated 30 March 2023
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Pakistan awaits China's decision on rollover of $2 billion loan

  • The rollover is critical for Pakistan as foreign exchange reserves have dipped to just four weeks worth of imports
  • As Pakistan struggles to avert a default on its obligations, the only help so far has come from longtime ally Beijing

KARACHI: China is working on a request by Pakistan to roll over a $2-billion loan that matured last week, a top finance ministry official told Reuters.

The rollover is critical for the South Asian nation, as its foreign exchange reserves have dipped to just four weeks worth of imports at a time when it is locked in talks with the International Monetary Fund (IMF) to secure bailout funds.

"It is a work in progress," the official said in a text message on Wednesday, on condition of anonymity. "Formal documentation is underway."

A formal announcement will be made, the source added, but gave no further details. The loan matured on March 23.

As Pakistan struggles to avert a default on its obligations, the only help so far has come from longtime ally Beijing, through a refinancing of $1.8 billion already credited to Pakistan's central bank.

The IMF funding is critical for Pakistan to unlock other external financing avenues, and the two have been negotiating since early February to resume $1.1 billion in funding held since November, part of a $6.5 billion bailout agreed in 2019.

One of the lender's last remaining conditions for release of the tranche is securing an assurance on external financing to fund Pakistan's balance of payments.


Pakistan hopes US immigrant visa processing will resume after policy review

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Pakistan hopes US immigrant visa processing will resume after policy review

  • State Department has suspended issuance of immigrant visas for nationals of 75 countries from Jan. 21
  • Pakistan says trade with Iran complies with international law as US announces additional 25 percent tariff

ISLAMABAD: Pakistan said on Thursday it was in contact with US authorities and hoped routine visa processing would resume after Washington completes an internal review of its immigration system that has led to a pause in immigrant visa issuances for several countries, including Pakistan.

The US State Department said on Wednesday it would suspend the issuance of immigrant visas for nationals of 75 countries, including Pakistan, from Jan. 21, as President Donald Trump presses ahead with a hard-line immigration agenda centered on financial self-sufficiency.

In an update published on its website, the State Department said it was conducting a comprehensive review of immigration policies to ensure that migrants from what it described as “high-risk” countries do not rely on public welfare in the United States or become a “public charge.”

Pakistan’s Foreign Office said it had taken note of the announcement and was in contact with US authorities to seek clarification on the scope and duration of the move.

“We are in touch with the US authorities to ascertain further details. This is an evolving news that we are following. We understand that this is an internal ongoing process of review of US immigration policies and system,” Foreign Office spokesperson Tahir Andrabi said.

The spokesperson added that Pakistan viewed the development as part of an internal US policy review and expressed hope that routine visa processing would resume once the review is completed.

Andrabi also addressed Washington’s decision that any country that does business with Iran will face a tariff rate of 25 percent on any trade with the US, as Washington weighs a response to the situation in Iran which is seeing its biggest anti-government protests in years.

“This is, again, an evolving story. Pakistan has the trade that takes place between Pakistan and other countries, follows international trade regulations and, of course, international law relevant to those trades,” he said.

He added that Pakistan had taken note of the US announcement and would continue engagement with Washington.

“We will work with the US authorities. Pakistan has had very positive trade in those years with the US and we look forward to culmination of those talks and a mutually beneficial agreement on trade with the US side.” 

During the course of his second term in office, Trump has often threatened and imposed tariffs on other countries over their ties with US adversaries and over trade policies that he has described as unfair to Washington.

Trump’s trade policy is under legal pressure as the US Supreme Court is considering striking down a broad swathe of Trump’s existing tariffs.

Iran exported products to 147 trading partners in 2022, according to World Bank’s most recent data.