China extends $2 billion loan repayment period for Pakistan
China has granted Pakistan an extension on a $2 billion loan, as confirmed by caretaker finance minister Shamshad Akhtar in response to Reuters on Thursday.
Originally scheduled for repayment in March, the $2 billion loan has now been rolled over for an additional year, according to Geo News, which initially reported the news, citing sources within the Pakistan finance ministry. Beijing communicated this decision to Islamabad, indicating a supportive measure for Pakistan's economic stability.
Pakistan is currently grappling with a cash-strapped economy, working to recover from a financial crisis. Last summer, the country secured a $3 billion standby arrangement from the International Monetary Fund (IMF) to aid in its economic stabilization efforts.
The extension of the loan repayment period comes at a crucial time for Pakistan, given its vulnerable external position. Ratings agency Fitch highlighted the significance of securing financing from both multilateral and bilateral partners, stating that this would be one of the most pressing issues for the upcoming government to address.
This move by China to extend the loan demonstrates a cooperative effort to assist Pakistan in navigating its economic challenges, providing the country with additional breathing room as it works towards financial recovery.
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