Islamabad requests Beijing to reschedule $3.4 billion debt

Pakistan has requested China to reschedule the 3.4 billion dollar debt for two years to bridge a foreign funding gap identified by the International Monetary Fund, revealed a media report on Saturday.

This is the second time in the past five months that Islamabad has requested Beijing to reschedule loans provided by its Exim bank.

Deputy Prime Minister Ishaq Dar made the formal request during this week’s visit to Beijing, The Express Tribune newspaper reported, quoting government sources.

Pakistan requested the Export-Import (Exim) Bank of China to consider rearrangement of its loans due from October 2024 to September 2027, said the government officials.

A two-year extension was sought to repay the official and guaranteed debt obtained from the bank. Pakistan would keep making interest payments.

Sources said Pakistan was required to identify financing sources to fill the external financing gap of 5 billion dollars for the three-year programme period.

They added the Chinese authorities were positive and that Beijing would hopefully accept the request to lessen Pakistan’s external funding woes.

Earlier, in September last year, the finance minister wrote to the Exim Bank, requesting the rescheduling.

According to a joint China-Pakistan statement issued on Thursday, the Pakistani side reiterated its high appreciation for China’s valuable support for its fiscal and financial stability. The statement was issued after President Asif Ali Zardari’s state visit to Beijing.

The 3.4 billion dollar debt was maturing between October 2024 and September 2027, which coincided with the three-year IMF programme period.