Pakistan has asked China to expedite the refinancing of a $1.3 billion commercial loan, with the funds expected to be received later this month once both sides finalise the terms and conditions.
According to media reports, officials from Pakistan and China are holding discussions to complete the refinancing agreement as quickly as possible.
The fresh inflow is expected to support Pakistan’s foreign exchange reserves, the foreign currency assets held by the central bank to meet external payment obligations and help maintain financial stability.
The reports said that the refinancing process would be completed after both countries agree on the final terms of the facility. Officials expect the funds to be disbursed within the current month following the conclusion of the negotiations.
The Ministry of Finance has stated that Pakistan made external payments of $2.2 billion in July, including the repayment of a $1.3 billion commercial loan to China. The refinancing would effectively restore that financing after the earlier repayment, providing additional support to the country’s foreign exchange reserves.
The expected inflow comes as Pakistan continues to manage its external financing requirements and seeks to maintain adequate foreign exchange reserves.
Separately, the Ministry of Finance said the State Bank of Pakistan is expected to purchase more than $7 billion from the interbank market during the current fiscal year.
According to the ministry, the dollars acquired through these purchases will be used to meet Pakistan’s external debt obligations and strengthen the country’s foreign exchange reserve position.
The refinancing request follows Pakistan’s repayment of the $1.3 billion Chinese commercial loan in July as part of total external payments amounting to $2.2 billion during the month.
Officials expect the renewed financing to be received later this month once the agreement’s terms and conditions are finalised.
