ISLAMABAD: China rolled over a $2 billion loan that matured last week, providing relief during the South Asian nation’s acute balance of payment crisis. Pakistani Finance Minister Ishaq Dar said on Friday confirmed the disbursement of the funds as the country struggles with external liquidity. As per sources, the reserves dipped to just four weeks worth of imports and talks over an International Monetary Fund bailout tranche of $1.1 billion have hit a stalemate.
“I am happy to confirm that this had been rolled over on March 23,” Dar told parliament, referring to the maturity date. He said all concerned documentation had been completed. However, there was no official response from the Chinese central bank.
IMF has to release its next tranches demanded, the cash stripped nationan the assurance of external financing to fund its balance of payments. Close friend of Pakistan came to the rescue to provide the much needed help with refinancing of $1.8 billion credited last month to Pakistan’s central bank.
Islamabad has been negotiating with the IMF since early February for the release of $1.1 billion from a $6.5 billion bailout package agreed in 2019. To unlock the funding, the government has cut back on subsidies, removed an artificial cap on the exchange rate, added taxes and raised fuel prices.