Pakistan seeks early refinancing of $1.3 billion Chinese loan

Pakistan seeks early refinancing of $1.3 billion Chinese loan

ISLAMABAD: Pakistan has formally requested China to speed up the refinancing of a $1.3 billion commercial loan as Islamabad seeks to strengthen its foreign exchange reserves and ease pressure on its external financing position.

According to sources, Pakistani authorities are currently holding discussions with their Chinese counterparts to complete the refinancing process at the earliest. The two sides are working to finalize the required terms, conditions, and procedural requirements.

Officials expect the refinancing arrangements to conclude soon, with the funds likely to reach Pakistan within the current month if the remaining formalities are completed on schedule.

Sources within the Ministry of Finance said the government expects the timely arrival of the funds to provide much-needed support to the country’s foreign exchange reserves. The refinancing would also help Pakistan manage its external debt obligations without placing additional pressure on its existing reserve position.

Pakistan made external payments of around $2.2 billion in July, including the repayment of approximately $1.3 billion in Chinese commercial financing. The government now seeks to refinance the repaid amount to maintain liquidity and strengthen its financial position.

The move comes as Pakistan continues to manage its external financing requirements and maintain adequate foreign exchange reserves to meet upcoming debt repayments and other international payment obligations. The successful completion of the refinancing deal with China would offer temporary relief to the country’s external account and support overall financial stability.