China has extended the reimbursement period of a loan of $ 2 billion to Pakistan for a year, offering crucial financial relief to the country, the Ministry of Finance confirmed on Saturday.
The loan was originally due to refund on March 24, but China agreed to differ to support economic stability and Pakistan recovery efforts, the ministry said in a statement.
“This extension will help Pakistan maintain their foreign exchange reserves and strengthen financial stability,” the statement added.
China has been a key economic partner for Pakistan, providing financial assistance and investments, particularly under the initiative of the Chinese-Pakistan Economic Corridor (CPEC), said Express News.
The extension occurs as Pakistan continues to browse the economic challenges, including a balance of ongoing payments and conversations with international lenders to ensure greater financial assistance.
The authorities say that the loan postponement will relieve immediate reimbursement pressures as the government focuses on stabilizing the economy.
In addition, earlier this week, Pakistan and the International Monetary Fund (IMF) officially initiated discussions for the first review of the extended fund installation (EFF) of $ 7 billion insured last year.
According to the Ministry of Finance, the IMF delegation, directed by Nathan Porter, met with the Minister of Finance, Muhammad Aurengzeb in Islamabad. The meeting focused on the general economic situation in the country.
During the meeting, Pakistan has assured the global lend of his commitment to fiscal discipline and economic reforms as conversations continue in Islamabad for the last economic review.
Finance Minister Muhammad Aurengzeb, informed the IMF delegation about the country’s macroeconomic situation, income collection and progress in structural reforms.
He reiterated that Pakistan is still committed to meet the conditions of his loan program of $ 7 billion.
