Islamabad: Cash-strapped Pakistan China has told its all-weather ally to expedite the refinancing of $1.3 billion in outstanding commercial loans and told it of dim prospects for reviving the International Monetary Fund loan program, a media report said Tuesday.
The Express Tribune reported that the request was made on Monday by Finance Minister Isaac Dar during a meeting with Chinese Chargé d’Affaires Pang Chunxue.
The report quoted sources as saying that the Chinese authorities have already confirmed to Pakistan that they will return the two loans, but Islamabad wants to re-lend the money once it is repaid. Dar urged the Chinese charge d’affaires to refinance the loans in a timely manner, which would support Pakistan’s foreign exchange reserves. Pakistan is scheduled to repay its $300 million debt to the Bank of China in less than two weeks. The cash-strapped country is also expected to repay another $1 billion to the China Development Bank within three weeks.
The country’s official foreign exchange reserves stand at $3.9 billion, and any delay in refinancing the loans could drag reserves to well below $3 billion. “The Acting Minister of Finance was also briefed on the progress made in talks with the International Monetary Fund on completing the ninth review,” the finance ministry said in a statement. Pakistan and the International Monetary Fund have failed to reach a staff-level agreement on a much-needed $1.1 billion rescue package aimed at preventing the country from bankruptcy.


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