China has rolled over $3.4 billion in loans to Pakistan, providing critical support to Islamabad’s foreign currency reserves ahead of the International Monetary Fund’s deadline at the end of the fiscal year on June 30, 2025. The move helps restore reserves to the required level of $14 billion, as mandated by Pakistan’s IMF programme ndtv
🔍 Breakdown of the Rollover
- $2.1 billion in deposits remained within Pakistan’s State Bank over the past three years.
- An additional $1.3 billion in commercial loans was refinanced after being repaid two months ago
🌍 Additional Inflows Strengthening Reserves
- Pakistan also secured $1 billion from Middle Eastern commercial banks.
- Another $500 million came from multilateral financial institutions
⚖️ Strategic Importance
- Meets IMF benchmark: Pakistan needed to maintain at least $14 billion in forex reserves by June 30, 2025, to comply with its $7 billion IMF bailout
- Stabilizes economy: The rollover reduces immediate repayment pressure and instills confidence in ongoing economic reforms
- Reflects deeper dependence on China: Pakistan’s reliance on Chinese financing highlights the significant role Beijing plays in its external debt structure
🔜 What to Watch
- IMF review: With reserve benchmarks met, attention will shift to IMF assessments and possible disbursements under the bailout programme.
- Future funding: Continued refinancing or fresh credit rounds may be necessary if external debt remains high.
- Debt sustainability: Observers will monitor how Pakistan balances short-term rollovers with long-term repayment obligations amid broader economic reforms.
✅ Bottom Line
China’s rollover of $3.4 billion in loans has given Pakistan a vital buffer to fulfill its IMF reserve obligations. While this eases immediate financial strain, it also highlights the country’s increasing dependency on external creditors, especially China, as it navigates a path toward economic stability.
