Pak aiming at loans worth USD 3.3 billion from Chinese banks

Islamabad, Jun 24 (PTI) Pakistan is aiming to secure USD 3.3 billion in the form of two foreign loans — one a syndicated loan and the other a refinancing of commercial loans — from Chinese banks within the next few days, according to a media report Tuesday.

It is expected that the foreign exchange reserves held by the State Bank of Pakistan (SBP) will surpass the USD 14 billion mark if this deal materialises within the outgoing financial year, which ends on June 30.

“Yes, we are still working closely with the Chinese high-ups to finalise modalities of this expected deal. We are expecting the striking of two different foreign loans from Chinese banks till the end of June 2025.

“A syndicated financing of USD 2 billion will be made available to Pakistan by a consortium of Chinese banks for three years,” top officials of the government confirmed while talking to The News here on Monday.

The second loan of USD 1.3 billion will be a refinancing of a commercial loan from the Industrial and Commercial Bank of China (ICBC), which was paid back by Islamabad a few months ago.

In rupee terms, the government will be able to generate approximately Rs 924 billion (USD 3.3 billion), so the maturity of the short-term domestic debt would be cleared till the deadline of the first 10 days of July 2025.

Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) stood at USD 11.7 billion by June 13, 2025 and the expected injection of USD 3.3 billion would help the SBP to jack up the foreign reserves to touch USD 15 billion mark.

However, keeping in view outflow requirements, there are strong expectations that the foreign reserves held by the SBP might be standing at over USD 14.5 billion by the end of June 2025.

Ministry of Finance Spokesman Qamar Abbasi did not share details when asked by The News about the possibility of two commercial loans and whether it would be provided in Chinese currency RMB instead of US dollars.

On Tuesday, Prime Minister Shehbaz Sharif expressed Pakistan's deep appreciation for China's consistent financial and economic support which he said has “stabilised Pakistan's economy” and said Islamabad was committed to work with Beijing for the completion of various projects under the CPEC.

The over USD 60 billion China-Pakistan Economic Corridor (CPEC) connects Gwadar Port in Pakistan’s Balochistan with China’s Xinjiang province.

Sharif's comments came during a meeting with Chinese ambassador Jiang Zaidong, according to an official statement here.

“The Prime Minister expressed Pakistan's deep appreciation for China's consistent financial and economic support that had helped to stabilise Pakistan's economy and resulted in the improvement of the macro-economic outlook of the country,” the statement said.

“This was vital to the government's socio-economic development agenda,” he added.

The CPEC, a global infrastructure and investment initiative by Beijing, was launched in 2013. It is considered the largest partnership of China's Belt and Road Initiative (BRI). It increased to over USD 62 billion over time, and at least USD 25 billion was invested in cash-strapped Pakistan.

The CPEC is opposed by India as it is being laid through Pakistan-occupied Kashmir. PTI SH NPK NPK