Islamabad has formally requested Beijing to reschedule $3.4 billion in debt for two years, a move critical to addressing a foreign funding gap identified by the International Monetary Fund (IMF). The request was made during Deputy Prime Minister Ishaq Dar&rsquo;s recent visit to China, according to government sources.
This is the second time in five months that Pakistan has sought debt relief from China&rsquo;s Export-Import (Exim) Bank. The rescheduling would cover loans maturing between October 2024 and September 2027, aligning with Pakistan&rsquo;s ongoing three-year IMF programme. Officials say China has responded positively, though a final decision is pending.
Pakistan&rsquo;s external financing plan requires securing $5 billion to meet IMF conditions. The country has also obtained a $1.2 billion Saudi oil facility and a $300 million loan through United Bank Limited to help bridge the gap. Failure to secure the rescheduling could add strain to Pakistan&rsquo;s already fragile economic position.
Pakistan remains heavily reliant on Chinese financial assistance, including $4 billion in cash deposits, $6.5 billion in commercial loans, and a $4.3 billion trade financing facility. Additionally, Finance Minister Muhammad Aurangzeb has requested China to increase its currency swap agreement limit by CNY 10 billion ($1.4 billion) to help manage debt obligations.
Global credit rating agency Fitch has warned that while Pakistan has made progress in stabilizing its economy, securing sufficient external financing remains a challenge. The country faces over $22 billion in external debt maturities this fiscal year, including nearly $13 billion in bilateral deposits. While key partners like Saudi Arabia and the UAE have rolled over funds, continued support remains crucial for economic stability.

Pakistan's Deputy Prime Minister Ishaq Dar

Request to Exim Bank is Islamabad's 2nd in 5 months, to bridge IMF-identified funding gap

Pakistan Asks China to Defer $3.4 Bn Debt by 2 Yrs

Request to Exim Bank is Islamabad's 2nd in 5 months, to bridge IMF-identified funding gap

February 8, 2025 | 16:22 IST