Islamabad: Cash-strapped Pakistan has received a rollover loan of $ 2 billion that matured last week from its “all-weather ally” China, finance minister Ishaq Dar said Friday, a move that will help Islamabad secure the much-required bailout from the IMF.
The rollover is one of the key requirements for Pakistan meeting its external financing needed for it to ink the staff-level agreement with the International Monetary Fund (IMF).
“I am happy to confirm that this has been rolled over March 23,” Dar told parliament, adding that all formalities were completed.
Pakistan, currently in the throes of a major economic crisis, is grappling with high external debt and dwindling foreign exchange reserves.
Pakistan is scrambling to increase its forex reserves which are estimated to be at $ 4.8 billion after China refinanced $ 500 million a fortnight ago.
Pakistan has been negotiating with the IMF for the release of a $ 1.1 billion bailout package since February but has so far met with little success due to the stringent conditions imposed by the Washington-based lender.
The funds are part of a $ 6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations.
The rollover comes days after Pakistan decided to skip the Democracy Summit in Washington so that it does not potentially upset its “all-weather ally” China.
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