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| Image: Online |
Pakistan has formally asked China to extend the $2 billion loan's maturity, which the CPEC counterpart is probably going to approve.
According to sources, Chinese Prime Minister Li Keqiang received a letter from Caretaker Prime Minister Anwar Haq Kakar requesting that China think about deferring the $2 billion loan repayment for a year.This is an important part of Pakistan's attempts to deal with its economic difficulties as it prepares for the general elections that take place next month.
The caretaker government is requesting a one-year extension on the repayment of the $4 billion in deposits, of which $2 billion are scheduled to maturity on March 23, 2024.
According to sources in the Finance Ministry, the rollover is being facilitated by continuing talks between the Ministry and Chinese officials; the process should be completed immediately.
The interim prime minister recognized in the letter that China has provided tremendous financial support, especially during difficult times; to date, China has rolled over $4 billion in SAFE deposits to Pakistan.
The choice to prolong the loan's term would be crucial in giving Pakistan the required financial flexibility.
This occurs just over a week after the State Bank of Pakistan verified on January 17, 2024, that the United Arab Emirates had carried over its two $1 billion deposits for a further year.
Prior to this, the central bank declared that it had received the $3 billion Stand-By Arrangement (SBA) second payment of $705.6 million from the International Monetary Fund (IMF).