China to roll over $3.7bn to Pakistan by June end

May 27, 2025 (MLN): In order to provide a key source of external support ahead of upcoming debt maturities, China has committed to roll over $3.7 billion in loans to Pakistan before the end of June 2025, people familiar with the matter said.

The amount includes $2.4bn set to mature next month and an additional $1.3bn that Pakistan repaid to the Industrial and Commercial Bank of China (ICBC) in March and April. 

The loans, denominated in Chinese yuan, are expected to not only shore up the State Bank of Pakistan’s foreign exchange reserves but also inject rupee liquidity into the domestic system.

That contrasts with International Monetary Fund (IMF) loans under the Extended Fund Facility, which are held at the central bank strictly for balance-of-payments support.

Combined with projected inflows from multilateral lenders and commercial sources, the rollover could help boost SBP’s reserves to $13bn–$14bn by the end of the fiscal year. 

Pakistan recorded a $1.9bn current account surplus during the first 10 months of FY25. However, reserves have not increased significantly due to persistent net outflows in the financial account.

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