China rolls over $3.4 billion of commercial loans to Pakistan

China has rolled over $3.4 billion in loans to Islamabad, which together with other recent commercial and multilateral lending will boost Pakistan’s foreign exchange reserves to $14 billion, a finance ministry source said on Sunday.

Beijing rolled over $2.1 billion, which has been in Pakistan’s central bank’s reserves for the last three years, and refinanced another $1.3 billion commercial loan, which Islamabad had paid back two months ago, the source said.

Another $1 billion from Middle Eastern commercial banks and $500 million from multilateral financing have also been received, he said.

“This brings our reserves in line with the IMF target,” he said.

The loans, especially the Chinese ones, are critical to shoring up Pakistan’s low foreign reserves, which the IMF required to be over $14 billion at the end of the current fiscal year on June 30.

Pakistani authorities say that the country’s economy has stabilised through ongoing reforms under a $7 billion IMF bailout.

Few days earlier, the Asian Development Bank (ADB) has approved a $800 million financing programme to support Pakistan’s fiscal sustainability and strengthen its public financial management systems, the Associated Press of Pakistan (APP) reported, citing a press release issued by the ADB.

The initiative, titled the “Improved Resource Mobilisation and Utilisation Reform Programme - Subprogramme 2,” includes a $300 million policy-based loan and ADB’s first-ever policy-based guarantee of up to $500 million.

Agencies