Months after rolling over a $4.5 billion loan that was due to be repaid this year, China has again bailed out Pakistan by providing $2.5 billion in assistance to support the rapidly declining foreign exchange reserves of its cash-strapped all-weather ally.
The Chinese assistance was announced after France and Pakistan agreed to suspend their $107 million loan as part of the G20 Debt Service Suspension Initiative (DSSI).
According to a statement released by Pakistan’s Economic Affairs Division on Monday, the agreement was signed by French Ambassador Nicolas Galey and Ministry of Economic Affairs Secretary Mian Asad Hayaud Din.
China’s latest assistance comes on top of Beijing rolling over a $4.5 billion debt due to be paid by Islamabad in March of this year and a $2.5 billion loan given in 2019 to boost Pakistan’s dwindling foreign exchange reserves.
Despite massive Chinese investments and loans, Pakistan is the second country in the subcontinent after Sri Lanka to face a serious economic crisis.
According to Pakistan’s Finance Minister Miftah Ismail, Chinese banks have agreed to refinance Pakistan with $2.3 billion in funds as a major relief for the cash-strapped nation and to help it bolster its dwindling foreign exchange reserves.
