ISLAMABAD: China has rolled over $3.4 billion in commercial loans to Pakistan, helping the South Asian nation meet the International Monetary Fund’s (IMF) requirement of $14 billion in foreign exchange reserves by the end of the fiscal year.
According to a senior official from the Ministry of Finance, Beijing has extended the repayment of a $2.1 billion loan that has remained in the State Bank of Pakistan’s (SBP) reserves for the past three years. Additionally, China has refinanced a $1.3 billion commercial loan which Islamabad had repaid two months earlier.
“These inflows bring our reserves in line with the IMF target,” the official said.
In addition to Chinese financing, Pakistan has received another $1 billion from Middle Eastern commercial banks and $500 million from multilateral sources. These developments come at a critical time as Pakistan seeks to stabilise its foreign exchange reserves and meet the conditions of its $7 billion IMF bailout programme.
The latest disbursements follow an earlier development on March 9, 2025, when China extended a $2 billion loan repayment by one year, according to the Ministry of Finance.
China remains Pakistan’s largest bilateral lender. According to The News, nearly 92% of Pakistan’s external debt is owed to three major sources: multilateral agencies, bilateral creditors, and international bonds—with China at the forefront among bilateral partners.
Despite these inflows, the SBP’s foreign reserves had dropped to $9.06 billion as of June 20, 2025, following a $2.66 billion decline in that week alone. With the recent funding, reserves are expected to meet the IMF’s end-of-year target, reinforcing economic stability.
