China to lend Pakistan $2 billion

ISLAMABAD: China has agreed to lend at least $2 billion to Pakistan for helping it boost its dwindling foreign exchange and tanking currency, the Financial Times reported.

The report, quoting two senior Pakistan government officials, said the loan is aimed at helping with a weakening fiscal position and high debts.

“China’s promise to Pakistan is an indication of their commitment to help us avoid a crisis. If the rupee falls sharply and we need to prevent its slide, we can turn to China,” a senior government official in Islamabad was quoted as saying by FT.

According to Jang reporter, the loan will be commercial and Pakistan will have to pay 8 percent interest on it. China has decided in principle that an economic package will be given to Pakistan. Discussions are going on in this regard.

In November, Geo News quoted sources as saying that Pakistan is expected to receive a $6 billion economic package from China during Prime Minister Imran Khan's visit. A loan of $1.5 billion and a grant of $1.5 billion are expected to be offered, along with an additional package of $3 billion for CPEC. Imran Khan had visited the country on November 2.

Pakistan is also in talks with the International Monetary Fund (IMF) for a financial bailout package.