China Loan Rollover to Pakistan Eases Fiscal Pressure

Romaan Khan
China Loan Rollover to Pakistan

China loan rollover to Pakistan came at a crucial time, just days before the fiscal year closed. Facing mounting pressure to meet IMF conditions, Pakistan secured $3.4 billion from China, giving the economy a much-needed breather and helping the country avoid a financial slip-up.

Of the full amount, $2.1 billion was already in the State Bank of Pakistan as deposits, which China agreed to extend. The remaining $1.3 billion had been paid off recently, but instead of withdrawing it, Chinese lenders refinanced the amount offering fresh support without new negotiations. That single decision helped Pakistan cross the $14 billion foreign reserve mark, a key target under its $7 billion IMF deal.

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The China loan rollover to Pakistan doesn’t just reflect emergency support it speaks to a deeper, long-standing relationship. China remains Pakistan’s most reliable financial partner, especially through massive projects like CPEC and the broader Belt and Road Initiative. This latest gesture shows Beijing’s confidence in Islamabad’s economic recovery, even when global institutions remain cautious.

In addition to China’s backing, Pakistan brought in $1 billion from Gulf-based banks and another $500 million from multilateral institutions, giving the central bank a temporary cushion. These efforts show the government’s active approach to avoiding another balance-of-payments crisis.

Still, not everyone is celebrating. Many economists warn that repeated loan rollovers, without tackling structural economic issues, may only delay deeper trouble. For now, though, this support has bought Pakistan valuable time and a chance to reset the course.