Cash-strapped Pakistan seeks additional 10 billion yuan loan from China: Report

Islamabad: Pakistan has requested an additional 10 billion yuan (USD 1.4 billion) loan from China as the cash-strapped country has already used the existing 30 billion yuan (USD 4.3 billion) Chinese trade facility, a media report said on Sunday.

Finance Minister Muhammad Aurangzeb, who met with China’s Vice Minister of Finance Liao Min on the sidelines of the annual meetings of the IMF and the World Bank in Washington, requested the Chinese side to raise the limits under the currency swap agreement to 40 billion yuan, a statement issued by the Finance Ministry late on Saturday said.

If Beijing accepts, the total facility will reach approximately USD 5.7 billion, The Express Tribune newspaper reported.

This is not the first time Pakistan has requested an increased debt limit, however, Beijing has declined all such past requests.

This latest request comes less than two weeks after China extended the current USD 4.3 billion (30 billion yuan) facility for another three years.

Pakistan and China had signed a currency swap agreement during Chinese Prime Minister Li Qiang's recent visit, extending Pakistan's debt repayment period to 2027.

Pakistan has already fully consumed the existing USD 4.3 billion, or 30 billion yuan, trade finance facility under the China-Pakistan currency swap arrangement to repay its debts.

Earlier this month, Chinese Premier Li Qiang, who arrived in Pakistan on a four-day visit, called on Pakistan President Asif Ali Zardari and the two leaders reaffirmed their commitment to further deepen strategic cooperation in different areas, including economy, investment and regional connectivity.

The two leaders also emphasised the need to expedite the implementation of China-Pakistan Economic Corridor (CPEC) projects, state-run Radio Pakistan reported.

Li’s visit to Pakistan was said to be the first by a Chinese premier in 11 years, with the last one by Li Keqiang in May 2013.