China agrees to refinance over $2.3 billion debt

Pakistan default threat

Finance Minister Miftah Ismail has said that China has agreed to refinance $2.3 billion in debt, providing a major financial relief to the government.

“The terms and conditions for refinancing of RMB 15 billion deposit by Chinese banks (about $ 2.3 billion) have been agreed,” Miftah wrote on his official Twitter handle on Thursday.

Inflow is expected shortly after some routine approvals from both sides. “This will help shore up our foreign exchange reserves,” he added.

Foreign exchange reserves of the State Bank of Pakistan declined by $190 million to $10.308 billion during the week ended on May 6, according to the central bank.The disbursement of loans by the multilateral creditors virtually paused due to the delay in reaching a deal with the International Monetary Fund, which also put on hold the budgetary support loans. The Ministry of Economic Affairs’ lack of focus on pushing the project executing agencies to fast-track the development work also caused the slowdown in loan disbursement in April.