China has agreed to extend the repayment period of a $2 billion loan to Pakistan by one year, providing significant financial relief, the Ministry of Finance confirmed on Saturday.
The loan, originally due for repayment on March 24, has been deferred to assist Pakistan in stabilizing its economy.
The ministry stated that the extension will support Pakistan in maintaining its foreign exchange reserves and reinforcing financial stability. China has been a crucial economic partner for Pakistan, contributing significant financial assistance and investments, particularly under the China-Pakistan Economic Corridor (CPEC) initiative.
The loan deferment comes at a time when Pakistan is grappling with economic difficulties, including a balance of payments crisis and ongoing negotiations with international lenders for further financial assistance. Officials indicated that the extension will alleviate immediate repayment pressures, allowing the government to focus on economic stabilization efforts.
Earlier this week, Pakistan and the International Monetary Fund (IMF) began discussions for the first review of the $7 billion Extended Fund Facility (EFF) agreed upon last year. The IMF delegation, led by Nathan Porter, met with Finance Minister Muhammad Aurangzeb in Islamabad to discuss the country’s macroeconomic outlook, revenue collection, and progress on structural reforms.
Pakistan reiterated its commitment to fiscal discipline and fulfilling the conditions of the loan program.
