China Rolls Over $3.4B Loans Boosting Pakistan Reserves to $14B

China has extended a $3.4 billion commercial loan to Pakistan by rolling over $2.1 billion held in Pakistan's central bank reserves for the past three years and refinancing a $1.3 billion commercial loan repaid two months earlier. This financial support, combined with $1 billion received from Middle Eastern commercial banks and $500 million from multilateral financing, has helped Pakistan's foreign exchange reserves reach the critical $14 billion level required by the IMF. These inflows are crucial for Pakistan to meet the conditions of a $7 billion IMF bailout program, which mandates maintaining reserves above $14 billion by the end of the fiscal year on June 30. Officials report that the Pakistani economy is showing signs of stabilization due to ongoing reforms tied to the IMF agreement. The funding also supports Pakistan's ongoing negotiations for a new long-term lending program following a recently completed $3 billion Stand-By Arrangement. Overall, the Chinese loans are seen as vital in shoring up Pakistan's low foreign reserves and ensuring continued IMF support.