ISLAMABAD - Finance Minister Ishaq Dar on Friday told the Senate that China has rolled over a $2 billion loan, which is crucial for Pakistan at a time when it is seeking a bailout tranche of $1.1 from the International Monetary Fund (IMF) to avert an economic default.
“I am happy to confirm that this had been rolled over on March 23 (the date when it matured),” said the finance minister while responding to a foreign media report that China was still working on the request of Pakistan to roll over this loan.
“This loan stands rolled over and it is no longer in the pipeline,” he said, adding that even its documentation for the financial year 2023-24 has been completed. He also termed the report “totally speculative.” Leader of the House Senator Dar informed the upper house of the parliament that the government didn’t make such developments public as it was part of its understanding with China for the last many years.
The cash-strapped Pakistan has been negotiating with the IMF since early February for a staff-level agreement for the release of $1.1 billion tranche from a $6.5 billion bailout package. However, the ruling coalition government’s talks with the international lender have hit a stalemate for the past few weeks. As a pre-condition to release the funds, the IMF has sought from Pakistan to get assurance of external financing from “friendly countries” to fund its balance of payments gap.
Earlier, former chairman Senate and PPP stalwart Mian Raza Rabbani sought a clarification from the finance minister over the foreign media report that China has still not rolled over the loan and there is no final word from the neighbouring country. The report quoted an unnamed official of Pakistan’s Ministry of Finance. Rabbani termed the remarks of the official as “highly improper” and asked the finance minister to give its version over it. This becomes important because the IMF, unlike the past, has put a condition that it would not sign a staff-level agreement with Pakistan till it gets confirmation of foreign funding from friendly countries, he added.
Pakistan Peoples party (PPP) Senator Rabbani said that China’s finance ministry and its central bank, the People’s Bank of China, have also not given comment on the query of the foreign media.