China extended the repayment period for a loan of $ 2 billion in Pakistan by one year, providing crucial financial relief to the country, the Ministry of Finance confirmed on Saturday.
The loan was initially the reimbursement on March 24, but China agreed to postpone it to support the efforts of economic stability and collection of Pakistan, the ministry said in a statement.
“This extension will help Pakistan maintain its exchange reserves and strengthen financial stability,” added the press release.
China has been a key economic partner for Pakistan, providing financial assistance and investments, particularly as part of the Chine-Pakistan Economic Corridor (CPEC) initiative, Express News reported.
The extension comes as Pakistan continues to face economic challenges, including a crisis in the balance of payments and ongoing interviews with international lenders to obtain additional financial aid.
Officials claim that the reversal of loans will facilitate immediate reimbursement pressures while the government is focused on stabilization of the economy.
In addition, earlier this week, Pakistan and the International Monetary Fund (IMF) officially launched discussions for the first review of the $ 7 billion (EFF) funded funds guaranteed last year.
According to the Ministry of Finance, the IMF delegation, led by Nathan Porter, met the Minister of Finance Muhammad Aurangzeb in Islamabad. The meeting focused on the country’s overall economic situation.
During the meeting, Pakistan assured the world lender of its commitment to tax discipline and economic reforms while talks continue in Islamabad for the last economic review.
The Minister of Finance Muhammad Aurangzeb informed the IMF delegation on the macroeconomic situation, the collection of income and the country’s progress on structural reforms.
He reiterated that Pakistan remains determined to fulfill the conditions of its $ 7 billion loan program.