China rolls over $2 billion loan to Pakistan as it struggles with external liquidity

Locking in a rollover had been critical for Pakistan, where reserves have dipped to just four weeks’ worth of imports and talks over an International Monetary Fund bailout tranche of $1.1 billion have hit a stalemate.

Pakistani Finance Minister Ishaq Dar said on March 31 that China had rolled over a $2 billion loan that matured last week, providing relief during the South Asian nation's acute balance of payment crisis.

Locking in a rollover had been critical for Pakistan, where reserves have dipped to just four weeks' worth of imports and talks over an International Monetary Fund bailout tranche of $1.1 billion have hit a stalemate.

"I am happy to confirm that this had been rolled over on March 23," Mr. Dar told parliament, referring to the maturity date. He said all concerned documentation had been completed.

Neither the government in Beijing nor the Chinese central bank responded to requests for comment on the rollover.

Mr. Dar's comments were the first official announcement of the rollover after the loan matured. Mr. Dar did not give the new maturity date or other terms of the arrangement.

A top finance ministry official told Reuters on Wednesday that a formal confirmation of the refinancing would be made after the process was completed.

One of the IMF's conditions for the release of the next tranche is assurance of external financing to fund Pakistan's balance of payments.