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.
- China, Pakistan: How a Leadership Summit Bolstered Cooperation (Nov. 5, 2018)
- Pakistan Trudges Along a Familiar Economic Path (Sept. 21, 2018)
- What Pakistan's New Prime Minister Faces in Power (Aug. 15, 2018)