Pakistan gets another $600 million loan from China, says PM Shehbaz

Cash-strapped Pakistan has received a rollover of an additional $600 million loan from its all-weather ally China to help shore up the country's foreign exchange reserves on the back of an IMF deal, Prime Minister Shehbaz Sharif said on Tuesday.

It is in addition to the over $5 billion in loans that Beijing has rolled over for Pakistan in the last three months, helping the debt-ridden nation avert a default as negotiations to secure the IMF bailout dragged on, the Dawn newspaper reported.

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Pakistan secured a last-gasp $3 billion bailout from the International Monetary Fund on June 30, which later disbursed an initial upfront instalment of about $1.2 billion.

Sharif said the Exim Bank of China has provided the rollover, increasing the country’s foreign exchange reserves by $600 million.

“Our foreign exchange reserves are increasing but we want to do it not through loans but generating our income,” he said at an event here.

Apart from the IMF bailout and the Chinese loan, a $2 billion of financial support from Saudi Arabia and $1 billion from the UAE after the IMF pact has helped steady Pakistan's economy, the report said, quoting Finance Minister Ishaq Dar.

The State Bank of Pakistan said the current account recorded a surplus of $334 million in June.