China to help Pakistan meet debt repayments worth $2.3 billion

Beijing had committed to help the country meet two crucial debt repayments in June worth $2.3 billion by providing fresh funds

Islamabad: As Pakistan struggles to secure the critical pending loan from the International Monetary Fund (IMF), the cash-strapped nation looks towards China to rollover more than $2 billion in debt due next month, media reports said on Thursday.

Islamabad is still contemplating ways to meet other repayment deadlines as the country has about $3.7 billion in overseas debt due this month and in June against its current foreign exchange reserves of just $4.3 billion, The News reported.

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Beijing had committed to help the country meet two crucial debt repayments in June worth $2.3 billion by providing fresh funds immediately after Pakistan makes the payments, Financial Times reported.

“The refinancing of the commercial loans worth $1.3 billion and a Chinese government loan of $1 billion would help Pakistan avert immediate default,” the officials said.

China had, earlier this year, already rolled over some loans to Pakistan and Chinese Foreign Minister Qin Gang also reiterated Beijing’s financial support for the country on a visit to Pakistan earlier this month. The Chinese government did not respond to a request for comment on the latest developments.

Warning of a possible risk of default, analysts said that they expected the relief from China one of Pakistan’s closest allies to come through.

“There’s no way that the Chinese…will walk back from Pakistan at this time,” said Uzair Younus, director of the Pakistan Initiative at the Atlantic Council, a Washington-based think-tank, referring to the June debt deadlines.