China has agreed to extend the repayment period for a $2 billion loan to Pakistan. This loan was due on March 23, which is Pakistan Day. Initially, China wanted to raise the interest rates on this loan, but it seems they’ve decided to extend the repayment period instead.
The Ministry of Finance officials have reached an agreement with Beijing, and they are waiting for a response from the Chinese embassy. Pakistan’s interim Prime Minister Anwaarul Haq Kakar had requested China to extend the loans last month.
Pakistan paid a significant amount of interest, totaling Rs26.6 billion, to China, Saudi Arabia, and the UAE last fiscal year. This amount increased by 118% compared to the previous year due to currency devaluation.
Pakistan’s gross official foreign exchange reserves are $8 billion, but it has been borrowing from regional countries during tough economic times. This borrowing has increased, and now it’s facing challenges in repayment.
