Pakistan has received a rollover loan of USD 2 billion from China, its “all-weather ally,” according to finance minister Ishaq Dar. This move will help Pakistan secure the much-needed bailout from the International Monetary Fund (IMF). The rollover is one of the key requirements for Pakistan to meet its external financing needs in order to sign a staff-level agreement with the IMF. Pakistan is currently facing a major economic crisis, grappling with high external debt and dwindling foreign exchange reserves. The country is scrambling to increase its forex reserves, estimated to be at USD 4.8 billion after China refinanced USD 500 million two weeks ago. Pakistan has been negotiating with the IMF for the release of a USD 1.1 billion bailout package since February, but has so far met with little success due to the stringent conditions imposed by the Washington-based lender. The funds are part of a USD 6.5 billion bailout package approved by the IMF in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations. The rollover comes days after Pakistan decided to skip the Democracy Summit in Washington so as not to potentially upset China.
