Pakistan will soon receive $3.3 billion in loans from Chinese banks, officials confirmed. The deal includes a $2 billion syndicated loan and a $1.3 billion refinancing plan. Negotiations with Chinese authorities are still ongoing to finalize the terms. This financial support aims to strengthen Pakistan’s foreign reserves.
Currently, Pakistan’s reserves stand at $11.7 billion. With the new loans, reserves could rise to nearly $15 billion by the end of June 2025. This boost will help Pakistan manage its short-term debts due in early July. The loans will ease financial pressure on the government and the economy.
The $2 billion syndicated loan will come from a group of Chinese banks. It will have a three-year repayment period. The $1.3 billion refinancing is linked to a previous commercial loan repaid by Pakistan to the Industrial and Commercial Bank of China (ICBC). This refinancing will help Pakistan manage past debt more smoothly.
Pakistan plans to use the $3.3 billion to pay off short-term domestic debt maturing soon. This step is part of a larger strategy to stabilize the country’s economy. Officials believe these loans will improve investor confidence and help stabilize financial markets.
The Ministry of Finance has not yet said if the loans will be in Chinese yuan or US dollars. Still, the government expects this loan deal to strengthen Pakistan’s economic outlook. Overall, the move aims to keep Pakistan’s economy steady in challenging times.