China rolls over $2.4bn loan to Islamabad, says Pakistan FM

State Bank of Pakistan (SBP). [File Photo]

Finance Minister of Pakistan Ishaq Dar said on Thursday that China has rolled over a $2.4 billion loan to Islamabad for a period of two years.

This will be a boost to the Pakistan’s economy as it tries to build its foreign reserves after clinching a deal with the International Monetary Fund (IMF).

In a tweet, the Finance Minister said the bank has rolled over the amount 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 over the next two years, Dar said.

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

The relief comes around a week after Prime Minister Shehbaz Sharif had announced that the same financial institution — Exim Bank of China — had rolled over $600 million to Pakistan.

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

The funds from friendly countries, including China, Saudi Arabia, and the UAE, have helped Pakistan avoid a sovereign default and secure a deal with the International Monetary Fund (IMF).

The IMF’s board had approved a $3 billion Standby Arrangement for Pakistan on June 30, with $1.2 billion being released initially and the rest to be provided after two reviews.

Pakistan’s foreign exchange reserves held by the central bank rose to the highest level in nine months at $8.7 billion as of July 14.

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