A top finance ministry official told Reuters that China is negotiating with cash-strapped Pakistan to roll over a $2-billion loan that matured last week (IMF).
Pakistan needs a rollover because its foreign exchange reserves are down to four weeks’ worth of imports, and it is seeking a $1.1 billion IMF rescue.
“That is a work in progress,” the official texted Wednesday about the Chinese loan rollover, which matured on March 23. “We’re formalizing.”
The anonymous source said a formal announcement would be made.
Reuters requested comment from China’s finance ministry and central bank, but neither responded.
China has refinanced $1.8 billion previously credited to Pakistan’s central bank to assist it in avoiding defaulting.
Pakistan needs IMF cash to unlock additional external loans. Since early February, the two have been negotiating to resume $1.1 billion in funding halted since November, part of a $6.5 billion bailout approved in 2019.
The lender needs an external financial guarantee to release the tranche.
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