Iron Brother rolls over $ 2 billion loan to give relief to Pakistan

Islamabad: In yet another friendly gesture to Pakistan, Iron Brother China has agreed to rolled over US $ 2 billion loan for a year.

Pakistani Ministry of Finance officials said Pakistan had secured a US $ 2 billion loan from China, carrying a 7.1% interest rate, with the loan set to mature in the March 2024.

Unveiling the details, finance ministry officials highlighted Pakistan’s payment of Pakistani Rs 26.6 billion in the previous fiscal year, directed towards China, Saudi Arabia, and the United Arab Emirates (UAE). These payments were in relation to the US $ 9 billion deposits placed by these three friendly nations within the confines of the State Bank of Pakistan (SBP).

The pivotal rollover not only bolsters the State Bank of Pakistan’s dwindling foreign reserves, currently resting at US $ 8 billion, but also marks a strategic move amidst the nation’s economic challenges.

Anwaarul Haq Kakar, the caretaker Prime Minister, earlier sent a letter to his Chinese counterpart Li Qiang, formally requesting the deferment of the US $ 2 billion loan.

This diplomatic gesture, detailed within the letter, served to express gratitude to the Chinese government for its steadfast financial support during Pakistan’s economic tribulations.

Within the missive, PM Kakar underscored China’s timely aid during dire straits, emphasizing the loan’s significance amid Pakistan’s economic landscape.

This strategic financial interplay is a continuation of a broader narrative, with US $ 4 billion in loans securely stowed away as a protective reserve. This prudent measure alleviates the weight of external payment obligations on Pakistan’s economic horizon.

The narrative weaves back to May of the previous year, where China emerged as a crucial ally during Pakistan’s tumultuous negotiations with the International Monetary Fund (IMF). Beijing, through a decisive move, deferred over US $2 billion in debt, easing the immediate financial burden on Islamabad.

Reiterating its commitment to Pakistan’s economic stability, Chinese Foreign Minister Qin Gang, in a visit last year, reiterated Beijing’s unwavering financial support, echoing the sentiment of a robust economic partnership between the two nations.