China has consented to keep Pakistan’s $2 billion loan maturing at its current conditions. The $2 billion debt, which matures on March 23, 2024, contains an agreement to postpone payment China has indicated informally that it will continue to extend the amortization, and the Ministry of Finance will not issue a circular until it receives a formal response.
Read More: Pakistan requests China to extend $2 billion loan
It is important to note that China had originally asked for a higher interest rate on the total, as opposed to the current 7.1% interest rate, which is determined by adding 1.75% to the 6M Secured Overnight Finance Rate (SOFR). In January, Chinese Prime Minister Li Keqiang received a letter from Caretaker Prime Minister Anwar Haq Kakar asking for a one-year extension on the $2 billion loan repayment.
Read More: China extends $2 billion loan to Pakistan
Two billion of the four billion dollars in deposits that were received from China are scheduled to maturity on March 23, 2024. Pakistan requested a one-year repayment postponement. The choice to prolong the loan’s term would be crucial in giving Pakistan the required financial flexibility. Additionally, the United Arab Emirates rolled over two $1 billion deposits last month for an additional year.
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