Pakistan’s friend of all seasons, has once again, shown what the friendship means for both countries. Yes, we’re talking about the one and only neighbor that has faith and trust in Pakistan, China.
The tested friend, came to Pakistan’s rescue once again, helping through one thing which Pakistan lacks the most, finances. Pakistan took a $3 billion loan from Saudi Arabia one and a half years back. Now, the repayment of the loan was due.
With China helping out, today, Pakistan has successfully repaid $1 billion to Saudi Arabia. Had Pakistan not made this payment, Pakistan would have fallen under international debt obligations. Saudi Arabia has already decided to reduce its financial support for Pakistan as per sources.
China comes to Pakistan’s rescue
China came to the rescue to maintain Pakistan’s deficit in the international stage and pay out the Saudi loan. The Saudis in their financial support for Pakistan, have been a little averse as of lately.
In 2018, Saudi Arabia came forward with a $3 billion financial cash package for Pakistan, which they now demand back. Along with this, the Saudis also gave $3.2 billion worth assistance in deferred payments for oil and gas.
In its report in April, the International Monetary Fund (IMF) said that “Saudi Arabia also refinanced $3-billion BOP (balance of payments) support loans that matured in November (2019)-January (2020).” But for Pakistan to repay $1 billion in 6 months only, was surprising for all parties.
The IMF has shown the importance of repayment of the $14.5 billion worth of debt that the Imran Khan government has taken since coming into power. The IMF has also insisted on quick repayment to avoid becoming international defaulters of debt.
“Debt sustainability is supported by the agreed rollover of maturing obligations by key bilateral creditors (China, Saudi Arabia, and the UAE), as demonstrated by the established track record over the past nine months,” said the IMF report.
Over $26 billion in loans taken by the PTI govt
This is where China stepped in. Understanding the situation Pakistan had fallen into, China has provided a $1 billion loan to Pakistan on easy repayment, to pay back Saudi Arabia. This will help keep the official gross foreign currency reserves stable at the current level.
Since coming into power, the PTI government has taken a total of $26.2 billion in loans, which has become a mammoth task to repay. However, with friends like China in support, there is no way that Pakistan cannot repay the remaining debt as well.
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