China rolls over additional $600M loan for Pakistan

KARACHI, Pakistan

Longtime ally China has rolled over another loan of $600 million to Pakistan, helping the cash-scarce South Asian country to prop up its depleting foreign exchange reserves and contain a deepening balance of payment crisis.

Announcing the development at a ceremony in the capital Islamabad on Tuesday, Pakistani Prime Minister Shehbaz Sharif said that China's Exim Bank provided the rollover, state-run Pakistan Television reported.

The latest rollover, which is in addition to over $5 billion in loans that Beijing has rolled over for Islamabad over the past three months, has come on the heels of a $3 billion loan deal with the International Monetary Fund (IMF).

“Our foreign exchange reserves are increasing but we want to do it not through loans but generating our income,” Sharif said.

Islamabad received $1.2 billion of the total $3 billion IMF package last week, in addition to $2 billion and $1 billion from Saudi Arabia and the United Arab Emirates, respectively.

With the fresh transfers, the country's forex reserves have reached over $13 billion.

Of these $13 billion, some $8.6 billion are held by the country's central bank, while the remaining are with the commercial banks.