China has rolled over $3.4 billion in loans to Pakistan, a major financial boost that, along with other inflows, is expected to raise the country’s foreign exchange reserves to $14 billion, meeting a critical benchmark set by the International Monetary Fund (IMF).
According to senior officials from Pakistan’s finance ministry, Beijing has extended the maturity of a $2.1 billion deposit that has remained in the State Bank of Pakistan’s reserves for the last three years, according to the WION.
In addition, a $1.3 billion commercial loan that Islamabad had repaid two months ago has been refinanced.
“These inflows bring our reserves in line with the IMF target,” one official toldReuterson June 29, speaking on condition of anonymity as an official announcement has not yet been made.
In addition to the Chinese rollover, Pakistan has secured $1 billion from commercial banks in West Asia and another $500 million from multilateral institutions. Combined, these financial injections have helped Islamabad reach the $14 billion reserve level required by the IMF at the close of the fiscal year on June 30.
Chinese lending crucial to IMF programme compliance
The rollover is particularly significant as Pakistan navigates its recovery under a $7 billion IMF bailout programme. Maintaining sufficient foreign exchange reserves is a central condition of the IMF agreement, and the Chinese support plays a critical role in fulfilling this obligation.
Chinese financial assistance has repeatedly been a lifeline for Pakistan in recent years. In March, Beijing extended the maturity of a separate $2 billion loan by one year, reflecting ongoing cooperation between the two nations.
Rolling over loans typically involves renegotiating repayment timelines without requiring immediate settlement, allowing the borrower to retain access to funds while easing repayment pressures.
Officials in Islamabad say that economic stability is gradually returning, crediting fiscal reforms enacted under the IMF programme.
However, they acknowledge that continued external support is vital to keep the recovery on track and avoid balance-of-payments pressures.
Pakistan has long struggled with low foreign reserves and external debt repayments. With IMF targets now met, policymakers hope to shift focus toward structural economic reforms and sustainable growth.
