Daily Times

The Export-Import Bank of China (EXIM) has extended a $2.4 billion loan to Pakistan, providing a sigh of relief to the outgoing Pakistan Democratic Movement-led government as it works to meet Pakistan’s debt payments due next year.

Finance Minister Ishaq Dar announced in a tweet that the bank has rolled over the funds for two years, which are due in the next two fiscal years — $1.2 billion in FY24 and the same amount in FY25.

“Pakistan will make interest payments only in both years,” the finance minister, whose government’s tenure will end in August, said.

The announcement comes less than a week after Prime Minister Shehbaz Sharif announced that the same financial institution, Exim Bank of China, had transferred $600 million to Pakistan.

This was in addition to the more than $5 billion in loans that Pakistan’s iron-brother China had rolled over in the previous three months, according to the prime minister.

Funds from friendly countries such as China, Saudi Arabia, and the United Arab Emirates (UAE) have helped Pakistan avoid a sovereign default and reach an agreement with the International Monetary Fund (IMF).

On June 30, the IMF’s board approved a $3 billion Standby Arrangement for Pakistan, with $1.2 billion released initially and the remainder provided after two reviews.

Pakistan’s central bank’s foreign exchange reserves increased to $8.7 billion as of July 14, the highest level in nine months, thanks to financial assistance from bilateral and multilateral partners.