$2bn rollover by China shields forex reserves

KARACHI: Extending a yet another major relief to cash-strapped Islamabad, the Chinese government has rolled over its $2 billion loan, which was due in March, for one year. The finance ministry on Thursday confirmed that China has accepted Pakistan’s request for the rollover, considering the country’s current inability to repay the loan. Most of the foreign exchange reserves of the State Bank of Pakistan (SBP) consist of loans from friendly countries. The central bank, which used to provide dollars for debt servicing, is now practically unable to repay foreign loans. The caretaker government, which managed to develop relations with the IMF under tough conditions and received $1.8bn under the Stand-By Arrangement, failed to improve foreign exchange reserves or devise a strategy for their increase.