Amid collapsing economy, Pakistan manages to convince China to rollover the debt
Mar 28, 2022
Islamabad [Pakistan], March 28 : In a major relief to the cash-strapped country, Pakistan, which is already facing a severe economic crisis, has managed to convince Beijing to rollover USD 4.2 billion debt that was maturing last week.
With the country currently plagued with high inflation and large debt, Islamabad's pleas have been heard by China as Beijing rollover the debt. This is a key development as it comes at a time when Pakistan had already made numerous requests to Beijing for the rollover.
The rollover consists of a USD 2 billion loan by China's State Administration of Foreign Exchange (SAFE) deposits and another USD 2.2 billion Chinese commercial loans, reported the Hong Kong Post.
According to the news portal, Islamabad had pleaded for a total USD 21 billion lifeline that included USD 10.7 billion rollover of both commercial and safe deposits.
Pakistan's outstanding loan to China is already humongous. The rollover relief provided follows Pakistan paying PRs 26.1 billion interest on the outstanding balance at agreed rates.
With Pak Rupee touching the lowest ever level of PRs 181.75 to a USD, Islamabad had also asked to increase the size of the currency swap facility with China from the existing USD 4.5 billion to USD 10 billion, reported HK Post.
The IMF recently stated that Pakistan owes USD 18.4 billion or one-fifth of its external public debt to China, the highest lending by any single country or financial institution. The amount is also USD 4 billion higher than Islamabad's official figures.
