Pakistan has sought an additional loan of 10 billion yuan (approximately USD 1.4 billion) from China, as the financially strained nation has fully utilized its existing trade facility of 30 billion yuan (around USD 4.3 billion), according to a recent media report.
During a meeting with China’s Vice Minister of Finance, Liao Min, on the sidelines of the IMF and World Bank annual meetings in Washington, Finance Minister Muhammad Aurangzeb requested that China increase the limits on their currency swap agreement to 40 billion yuan. A statement from the Finance Ministry indicated this request was made late Saturday.
If approved, this would raise the total facility to about USD 5.7 billion, as reported by The Express Tribune.
This is not Pakistan’s first attempt to request an increase in the debt limit; previous requests have been declined by Beijing. The latest plea comes shortly after China extended the existing USD 4.3 billion (30 billion yuan) facility for an additional three years.
Pakistan and China had formalized a currency swap agreement during a recent visit from Chinese Premier Li Qiang, which included an extension of Pakistan’s debt repayment period until 2027.
Having fully utilized the current USD 4.3 billion trade finance facility under the China-Pakistan currency swap arrangement, Pakistan is now looking for further financial support to manage its debt obligations.
Earlier this month, during a four-day visit to Pakistan, Premier Li Qiang met with President Asif Ali Zardari, and both leaders reaffirmed their commitment to enhancing strategic cooperation in various sectors, including economy, investment, and regional connectivity.
Li’s visit marked the first by a Chinese premier in 11 years, following the last visit by Li Keqiang in May 2013. The two leaders also stressed the importance of accelerating the implementation of projects under the China-Pakistan Economic Corridor (CPEC), as reported by state-run Radio Pakistan.