China extends helping hand, rolls over $2bn loan to Pakistan

February 28, 2024 (MLN): China, portraying a true friendship gesture in a time of need, has agreed to roll over a $2 billion loan, which was set to mature in March.

This development came as a welcome relief for Pakistan, whose reserves had dipped to $8.01 billion as reported last week.

It is worth mentioning that the loan, originally secured at a 7.1% interest rate, would have added further strain to Pakistan's fiscal position if matured as scheduled.

Thus, the decision to extend the loan provides a crucial lifeline for Pakistan's economic stability.

This development follows Pakistan's expectation of significant funds inflows amounting to $14 billion in the fiscal year 2024, as reported in September 2023, according to Bloomberg.

This relief of rollover of the loan from China not only alleviates immediate pressure on the country's reserves but also brings it into line with its broader strategy to improve financial resilience while maintaining a steady influx of capital.

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