China has extended the repayment period on a $ 2 billion loan to Pakistan by one year and offered crucial financial relief to the country, the Ministry of Finance confirmed on Saturday.
The loan was originally due to repayment on March 24, but China has agreed to postpone it to support Pakistan’s financial stability and recovery efforts, the ministry said in a statement.
“This extension will help Pakistan maintain its currency reserves and strengthen financial stability,” the statement added.
China has been an important financial partner for Pakistan, providing financial assistance and investment, especially under China -Pakistan Economic Corridor (CPEC) initiative, Express News reported.
The expansion is coming as Pakistan continues to navigate financial challenges, including a balance of the payment crisis and ongoing conversations with international lenders to ensure further financial assistance.
Officials say the postponement of the loan will facilitate immediately repayment pressure as the government focuses on stabilizing the economy.
In addition, Pakistan and the International Currency Fund (IMF) earlier this week began official discussions for the first review of the extended fund facility (EFF), which was secured last year.
According to the Ministry of Finance, the IMF delegation, led by Nathan Porter, met with Finance Minister Muhammad Aurangzeb in Islamabad. The meeting focused on the overall financial situation in the country.
During the meeting, Pakistan has insured the global lender for his commitment to fiscal discipline and economic reforms as conversations continue in Islamabad for the latest economic review.
Finance Minister Muhammad Aurangzeb informed the IMF delegation on the country’s macroeconomic situation, revenue collection and progress with structural reforms.
He reiterated that Pakistan remains obliged to fulfill the conditions of his $ 7 billion loan program.
