Pakistan has formally requested China to extend the maturity of a $2 billion loan which the CPEC counterpart is likely to accept, well-informed sources told ProPakistani.
Sources said the request was communicated through a letter from Caretaker Prime Minister Anwar Haq Kakar to Chinese Prime Minister Li Keqiang. The letter urged China to consider postponing the repayment of the $2 billion loan for a period of one year. This comes as part of Pakistan’s efforts to manage its economic challenges as it gears up for General Elections next month.
Out of the $4 billion deposits received from China, $2 billion will mature on March 23, 2024. The caretaker government is seeking a one-year extension on the repayment.
Finance Ministry sources said ongoing communications between the Ministry and Chinese authorities to facilitate the rollover. The process is expected to be concluded soon.
In the letter, the interim PM acknowledged China’s significant financial support, particularly during challenging times. Notably, China has so far rolled over $4 billion in SAFE deposits to Pakistan.
The decision to extend the maturity of the loan will be instrumental in providing Pakistan with the necessary fiscal flexibility.
This comes a little over a week after the State Bank of Pakistan on 17 January 2024 confirmed that the United Arab Emirates had rolled over its two deposits of $1 billion each for another one year.
Earlier, the central bank also confirmed that it has received the second tranche of $705.6 million from the International Monetary Fund (IMF) under the $3 billion Stand-By Arrangement (SBA).
