China helps Pakistan pay off a debt of $2.3 billion
ISLAMABAD, May 25 (IANS) As Pakistan struggles to secure a significant outstanding loan from the International Monetary Fund, the cash-strapped country is eyeing China to roll over more than $2 billion in debt due next month, media reports said Thursday.
Islamabad is still considering ways to meet repayment deadlines as the country has about $3.7 billion in external debt due this month and in June against current foreign exchange reserves of just $4.3 billion, Al-Akhbar reported.
The Financial Times reports that Beijing has committed to helping the country make two important debt payments in June worth $2.3 billion by providing new funds immediately after Pakistan makes the payments.
“The refinancing of the $1.3 billion commercial loan and the $1 billion Chinese government loan will help Pakistan avoid immediate default,” the officials said.
China, earlier this year, renewed some loans to Pakistan, and Chinese Foreign Minister Chen Gang confirmed Beijing’s financial support for the country on a visit to Pakistan earlier this month. The Chinese government did not respond to a request for comment on the latest developments.
Analysts have warned of the possibility of a default and said they expect relief to come from China – one of Pakistan’s closest allies -.
“There is no way the Chinese will withdraw … from Pakistan at this time,” said Uzair Yunus, director of the Pakistan Initiative at the Atlantic Council, a Washington-based think tank, referring to the June debt deadlines.