situation report

Pakistan, China: Islamabad Receives $2.1 Billion Loan From Beijing

1 MIN READMar 26, 2019 | 14:43 GMT

What Happened: The State Bank of Pakistan has announced on Twitter that it has received a $2.1 billion loan from China, Dawn reported March 25. The loan has boosted Islamabad's low foreign exchange reserves to $10.67 billion. 

Why It Matters: China is helping bail out Pakistan — one of its strongest partners — at a time when the country faces weak economic growth. While the loan will not be a cure-all, it will help Islamabad avoid defaulting on its payments, which would further hurt the country’s credit rating and make it all the more difficult to raise financing in the future. 

Background: Pakistani Finance Minister Asad Umar is meeting with the mission chief of the International Monetary Fund, Ernesto Ramirez Rigo, on March 26 to discuss additional bailout funding for the country. 

 

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