Friday, January 26, 2024

PM Kakar requests China to roll over $2bn loan

Deposit time for loan will end on March 23, 2024

A dealer counts US dollars at a money exchange market in Karachi, Pakistan on March 2, 2023. — AFP
A dealer counts US dollars at a money exchange market in Karachi, Pakistan on March 2, 2023. — AFP

  • Deposit time for loan completes on March 23.
  • China expected to roll over loan upon request.
  • UAE also deferred loan deposits worth $2bn.

After requesting the United Arab Emirates (UAE) to roll over $2 billion in loans for Pakistan, Caretaker Prime Minister Anwaar-ul-Haq Kakar has also written a similar letter to his Chinese counterpart Li Qiang.

In his letter to China's premier, the prime minister has requested that Beijing roll over Pakistan's $2 billion loan for a year, sources told Geo News on Friday.

The Chinese government, according to the sources, is expected to roll over the aforementioned loan amount for a year soon.

The deposit time for the loan is slated to complete on March 23, 2024.

The sources added that the officials from Pakistan's finance ministry and authorities in China are in contact about the matter.

PM Kakar, in his letter to the Chinese premier, thanked his government for financial support, the finance ministry sources said.

The sources, citing the letter, stated: "China gave a loan to the government of Pakistan in a difficult economic situation."

A total of $4 billion worth of funds in loans, as per the sources, has been kept as a safe deposit, which has reduced Pakistan's external payments burden.

Last year in May, Beijing came to Pakistan's rescue during its struggle to secure the critical pending loan from the International Monetary Fund (IMF), as the Chinese government rolled over more than $2 billion in debt.

The friendly neighbour had committed to help Islamabad meet two crucial debt repayments in June worth $2.3 billion by providing fresh funds immediately after Pakistan was to make the payments.

"The refinancing of the commercial loans worth $1.3 billion and a Chinese government loan of $1 billion would help Pakistan avert immediate default," a senior government official told The News in May 2023.

Earlier in 2023, China had already rolled over some loans to Pakistan and Chinese Foreign Minister Qin Gang also reiterated Beijing’s financial support for the country on a visit to Pakistan back in May last year.