ISLAMABAD: Pakistani Finance Minister Ishaq Dar said on Friday China had rolled over a $2 billion loan to the cash-strapped country on March 23, dismissing what he called “speculative” media reports that the loan was still in the pipeline.
The rollover of the loan is critical for Pakistan as it faces a balance of payment crisis, soaring inflation, and dwindling foreign exchange reserves, barely enough to cover a month of controlled imports.
Islamabad has been negotiating with the IMF since early February for the release of $1.1 billion from a $6.5 billion bailout package agreed in 2019.
One of the IMF's conditions for the release of the tranche is assurance of external financing to fund Pakistan's balance of payments. Longtime ally Beijing is the only help Islamabad has got so far, with refinancing of $1.8 billion credited last month to Pakistan's central bank.
“I am happy to confirm that this [loan] had been rolled over on March 23,” the finance minister told parliament on Friday, responding to a Reuters report this week that quoted an anonymous source as saying China was still working on a request by Pakistan to roll over a $2-billion loan that matured last week.
“The documentation [related to the loan] for 2023 and 2024 has been completed, this loan stands rollover and is no longer in the pipeline.”
Dar's comments were the first official announcement of the rollover after the loan matured. Dar did not give the new maturity date or other terms of the arrangement.
