Islamabad: China has consented to extend the term of a USD 2 billion loan to Pakistan on its current conditions, as per the report by a news source on February 28.
As per the details, the loan will now be subject to a postponement, pending formal confirmation from the Finance Ministry, after China’s informal indication of extending the repayment schedule.
Originally, China had proposed a higher interest rate for the loan, differing from the current 7.1%, which is calculated based on the 6M Secured Overnight Finance Rate (SOFR) plus 1.715%. Responding to this, Caretaker Prime Minister Anwar Haq Kakar formally sought a one-year extension for the repayment of the USD 2 billion loan in a letter addressed to Chinese Prime Minister Li Keqiang in January.
Out of the USD 4 billion in deposits received from China, USD 2 billion is due for maturity on March 23, 2024, prompting Pakistan’s request for an extension. This decision is significant in providing Pakistan with essential fiscal manoeuvrability.
As a graduate in English Literature, Zohaib believes that words are not just a mere figment of imagination. It takes wisdom to be good at them. Following this reason, he is pursuing his career as Public Relations and Content Specialist at Zameen.com.
