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Pakistan has received significant financial relief as China has agreed to extend the repayment period of a $2 billion loan by one year, the country’s finance ministry confirmed on Saturday. Originally due for repayment on March 24, experts believe that the loan deferment aims to support Pakistan’s economic stability and recovery efforts.
In a statement, the finance ministry emphasized the importance of this extension, highlighting its role in maintaining the country’s foreign exchange reserves and strengthening financial stability.
China has long been a key economic partner for Pakistan, providing financial assistance and investments, particularly through the China-Pakistan Economic Corridor (CPEC) initiative.
This latest loan extension comes as Pakistan continues to face economic challenges, including a balance of payments crisis and ongoing negotiations with international lenders for additional financial support.
Officials believe that the deferment will ease immediate repayment pressures, allowing the government to focus on stabilizing the economy.
Meanwhile, discussions between Pakistan and the International Monetary Fund (IMF) have officially begun for the first review of the $7 billion Extended Fund Facility (EFF) secured last year.
Earlier this week, an IMF delegation led by Nathan Porter met with Finance Minister Muhammad Aurangzeb in Islamabad to assess the country’s economic situation. During the meeting, Pakistan reaffirmed its commitment to fiscal discipline and economic reforms, assuring the global lender of its dedication to meeting the conditions outlined in the loan program.
Finance Minister Aurangzeb briefed the IMF delegation on Pakistan’s macroeconomic landscape, including revenue collection and progress on structural reforms. As discussions continue, the government remains focused on implementing necessary measures to navigate financial challenges and sustain economic stability.
