China Extends $3.4 Billion in Loans to Assist Pakistan in Meeting IMF Reserve Requirements
China has extended $3.4 billion in loans to Pakistan, offering substantial financial support as the nation strives to fulfill International Monetary Fund (IMF) conditions, according to two senior Pakistani government officials who spoke to Reuters.
This financial package includes $2.1 billion that has been held by Pakistan's central bank over the past three years and a renewed $1.3 billion commercial loan initially repaid earlier this year. This development comes as Pakistan approaches the end of its fiscal year on June 30, a date by which the IMF has stipulated that the country's foreign exchange reserves must surpass $14 billion.
Alongside the aid from China, Pakistan has also secured $1 billion from Middle Eastern commercial banks and an additional $500 million through multilateral financing. According to one official, these funds have aligned the country's reserves with the targets set by the IMF.
The officials requested anonymity as an official government announcement has not yet been made.
The assistance from China is seen as pivotal for sustaining economic stability in Pakistan, which is in the process of executing reforms as part of a $7 billion IMF bailout program. Pakistani authorities assert that these reforms are beginning to stabilize the economy and rebuild trust in financial governance.
The IMF's guidelines, which emphasize reserve accumulation and fiscal discipline, are being closely scrutinized as Pakistan endeavors to prevent a balance of payments crisis and attract further international backing in the upcoming months.
