China rolls over US $ 1 billion loan for Pakistan

Islamabad: State Bank of Pakistan (SBP) has confirmed that Iron Brother China had rolled over a US $ 1 billion loan.

The all-weather friend China came to Pakistan’s rescue as crucial International Monetary Fund (IMF)’s bailout funds stalled, and Islamabad has billions in overseas debt due in the near future with inadequate foreign reserves.

“This is to inform you that (US) $1 billion has been received from China,” said the central bank in a brief message to media on Friday night.

This had provided much-needed relief as cash strapped country faces a balance of payment crisis.

Pakistan get the amount in the form of a commercial loan as the central bank made an advance payment to Beijing this week, and now the Chinese government returned the amount to Pakistan.

The payment was received as Finance Minister Ishaq Dar announced the expected roll over. Briefing the Standing Committee on Finance, Dar said that the $1 billion loan paid to China will be repaid by today.

He further mentioned that the government was also in talks with the Bank of China for an amount of US $ 300 million.

Earlier this year, the country’s central bank received $500 million from the Commercial Bank of China as part of a $1.3 billion rollover facility.

Pakistan’s strategic partner China continued to help crisis-hit country meet crucial debt repayments by providing fresh funds, a move which help South Asian country avert debt default as local governments relied on global lenders like IMF and friendly nations China to finance its budget deficit.

The federal government is also making several changes in tax collection but fiercely resisted some of the measures demanded by the IMF, like cuts on subsidies and amnesties.