China has shown readiness to reschedule $1.8 billion of Pakistan’s debt for a period of two years, offering crucial support as Islamabad works to meet key benchmarks of the International Monetary Fund (IMF) programme. While this amount is only half of what Pakistan originally requested last year, it remains vital in stabilizing the country’s external financing outlook.
According to officials, Pakistan had requested rescheduling of various concessional loans, including preferential buyer credit and buyer’s credit from the Export-Import (Exim) Bank of China. However, Beijing has not agreed to defer the buyer’s credit loans, limiting the overall relief package.
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Government sources indicate that the rescheduling of $1.8 billion in concessional and preferential buyer credit loans may be finalized by next month. These loans are linked to infrastructure and development projects, separate from commercial loans extended by Chinese banks.
The development comes as Pakistan’s foreign exchange reserves briefly fell below $10 billion due to recent debt repayments to Beijing. However, officials expect reserves to rebound to nearly $14 billion in the coming week once China completes the refinancing process.
