In a timely financial reprieve for Pakistan’s struggling economy, China has rolled over $3.4 billion in loans, giving Islamabad’s dwindling foreign reserves a much-needed lift as the country rushes to meet targets set by the International Monetary Fund (IMF), senior government officials confirmed on Sunday.
The development comes just ahead of the June 30 fiscal year-end, a crucial checkpoint under Pakistan’s ongoing $7 billion IMF program. According to two senior officials familiar with the matter, the package includes the renewal of $2.1 billion parked in the State Bank of Pakistan’s reserves for the past three years, along with the refinancing of a $1.3 billion commercial loan that Islamabad had already repaid two months ago.
“This brings our reserves in line with the IMF target,” said one of the officials, who requested anonymity due to the sensitivity of the negotiations and the absence of a formal announcement.
In addition to the Chinese assistance, another $1 billion has arrived from Middle Eastern commercial banks, while $500 million in multilateral support has also been secured, the official added.
The rollover by Beijing is seen as a strategic lifeline for Islamabad, which has been juggling payments amid a persistent balance of payments crisis. Meeting the IMF’s requirement of maintaining foreign reserves above $14 billion by the end of June was a key benchmark for continued support from the global lender.
“This is not just about numbers on paper. These inflows give markets confidence and help us avoid unnecessary shocks,” said a finance ministry source. “The Chinese support, in particular, is timely and appreciated.”
Pakistan’s foreign exchange reserves have remained under pressure for months, with the central bank often relying on friendly nations and short-term financing to keep them afloat. While the IMF program has provided some stability through structural reforms, the economy remains vulnerable to external shocks, including fluctuating oil prices and currency volatility.
With the latest inflows now in hand, Pakistani authorities are expected to focus on sustaining reform momentum and boosting revenue generation to ensure long-term fiscal stability.
The finance ministry has not yet issued an official statement, but an announcement is expected in the coming days.
