China Refinances $3.4 Billion as Pakistan Meets IMF Reserve Requirement

China has rolled over $3.4 billion in loans to Pakistan, two senior Pakistani government officials told Reuters on Sunday, in a move that will help boost Islamabad’s foreign exchange reserves, a requirement of the International Monetary Fund (IMF).

Beijing rolled over $2.1bn, which has been in Pakistan’s central bank’s reserves for the last three years, and refinanced another $1.3bn commercial loan, which Islamabad had paid back two months ago, the sources said.

The officials asked not to be named as they were not authorised to discuss the matter publicly ahead of an official announcement.

Another $1bn from Middle Eastern commercial banks and $500 million from multilateral financing have also been received, one of the officials said.

“This brings our reserves in line with the IMF target,” he said.

The loans, especially those from China, are critical to shoring up Pakistan’s low foreign reserves, which the IMF required to be over $14bn at the end of the current fiscal year on June 30.

Pakistani authorities say that the country’s economy has stabilised through ongoing reforms under a $7bn IMF bailout.