By Staff Reporter
ISLAMABAD: China has rolled over a $600 million loan to Pakistan, boosting the country’s foreign exchange reserves as it seeks to stabilise its economy under an International Monetary Fund (IMF) program.
The loan from the Export-Import Bank of China was in addition to more than $5 billion that the longtime ally has extended to Pakistan in the past three months, Prime Minister Shehbaz Sharif said on Tuesday.
Pakistan also received $2 billion from Saudi Arabia and $1 billion from the United Arab Emirates after securing the IMF deal, which disbursed an initial installment of about $1.2 billion.
The financial support has helped steady the economy, which has been battered by a balance-of-payments crisis.
“Our foreign exchange reserves are increasing but we want to do it not through loans but generating our income,” Sharif said at a youth sports event in Islamabad, according to Radio Pakistan.
Pakistan has relied on external debt and loan rollovers to shore up its dwindling foreign exchange reserves, which stood at $9.83 billion, according to the central bank.
The country also entered a shorter, nine-month standby arrangement with the IMF after the expiry of its previous $6 billion bailout program.
The IMF deal requires Pakistan to implement reforms, including a tight monetary policy aimed at disinflation and further progress on structural reforms, particularly in the energy sector, state-owned enterprises governance and climate resilience.
The fund expects Pakistan’s economy to grow by2.5 percent in the fiscal year that started on July 1, after contracting by 0.3 percent in the previous year.
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