ISLAMABAD, June 30 (Alliance News): China has rolled over a $3.4 billion loan to Pakistan, a critical move that helps Islamabad meet the International Monetary Fund’s (IMF) condition to shore up its foreign exchange reserves to $14 billion by June 30.
According to Reuters, which cited senior officials from Pakistan’s Ministry of Finance, Beijing has extended the repayment of $2.1 billion currently parked in the State Bank of Pakistan (SBP) for the last three years. In addition, $1.3 billion in previously repaid commercial loans have also been renewed.
Finance Ministry sources said the rollover comes at a crucial time, as it strengthens Pakistan’s foreign exchange buffer. The cumulative injection — including $1 billion in loans and multilateral funding from commercial banks in the Middle East — has now raised Pakistan’s foreign exchange reserves in line with the IMF’s year-end requirement.
“The rollover by China and inflows from Gulf-based banks have helped us meet the reserve benchmark agreed with the IMF,” a senior official said.
These developments come as Pakistan navigates an economic reform programme under a $7 billion IMF bailout package, designed to stabilize the country’s struggling economy.
The IMF had made it mandatory for Pakistan to raise its foreign exchange reserves to at least $14 billion by the end of June 2025 to qualify for further disbursements under the loan programme.
The increased reserves now position Pakistan for a potential continuation or extension of the programme.
China’s timely support, through both sovereign and commercial rollovers, has long served as a financial cushion for Pakistan, particularly during fiscal crunches and IMF negotiations. Islamabad views Beijing’s consistent economic backing as an anchor of its external financing strategy.
Pakistan has also received additional multilateral support from Middle Eastern banks, indicating regional confidence in Islamabad’s economic reforms.
These inflows come amid efforts to reduce the fiscal deficit, improve tax collection, and implement energy sector reforms as part of the IMF’s structural benchmarks.
Finance ministry officials have expressed optimism that the improved reserve position will ease pressure on the Pakistani rupee and provide room for targeted economic growth initiatives.
However, experts caution that while external support offers short-term relief, structural economic reforms remain essential for sustainable stability.
The IMF is expected to review Pakistan’s performance in the coming weeks, with a new loan programme also under consideration as Islamabad prepares its budgetary framework for fiscal year 2025–26.
