China withdraws $2.4 billion in loans over two years: Gift

 by web desk

China withdraws $2.4 billion in loans over two years: Gift

Finance Minister Ishaq Dar said on Thursday that China's Export-Import (Exim) Bank was repaying $2.4 billion in loans over the next two years.

"China's EXIM Bank has rescheduled for 2 years the principal of the following loans totaling US$2.4 billion due in the next 2 fiscal years," he announced in a tweet.

The minister said the extension for this year is $1.2 billion and $1.2 billion for next year.

"Pakistan will pay interest only in both years," the finance minister said.

Last week, China agreed to restructure more than $2 billion of Pakistan's publicly guaranteed debt over a two-year period, providing major relief to the government, which is in the process of restoring foreign exchange reserves through new loans and rolling over maturing debt.

The Economic Coordination Committee (ECC) of the Cabinet has approved the revised terms of the agreement reached between Islamabad and Beijing, according to senior Pakistani officials.

Time and again, China has helped Pakistan meet its debt obligations by providing new loans and transferring existing debt. China refinanced $1.3 billion of its commercial loans early in June, helping Pakistan avoid defaulting on its international debt obligations during a period when the International Monetary Fund program was suspended.

Following the signing of the new IMF program, Pakistan's gross official foreign exchange reserves have returned to $8.7 billion – from a critically low level of $4.5 billion before the IMF deal.