Cashless Pakistan asks for another year to repay Chinese loans



IslamabadDebt-ridden Pakistan has asked its all-weather ally China to take another year to recover the billion dollars Islamabad borrowed from Beijing last year.

According to The Frontier Post, Prime Minister Imran Khan wrote a letter to Chinese Prime Minister Li Keqiang on June 8 stating that Pakistan should repay the $ 1 billion borrowed on July 23, 2021.

Imran Khan further stated that thanks to this support from China, “this deposit is helping to significantly reduce the pressure on our external account.”

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He asked for another 12 months for Pakistan to pay off the loan at an interest rate of one percent, The Frontier Post reported.

Earlier, the debt problems of bankrupt Pakistan were exacerbated when China refused to restructure its obligations by $ 3 billion.

Islamabad has asked Beijing to write off debt on China-financed energy projects created under the China-Pakistan Economic Corridor (CPEC).

According to media reports, China refused to give way to Islamabad’s request to renegotiate power purchase agreements, saying any debt relief would require Chinese banks to change their loan terms.

Banks, including the China Development Bank and the Export-Import Bank of China, were not prepared to revise any clauses of the agreement previously reached with the government, Beijing said in response to a request to renegotiate terms.

Pakistan has already entered the “danger zone” of sovereign debt with total liabilities and debts of $ 294 billion, or 109 percent of GDP as of December 30, 2020.

As Pakistan’s financial debt continues to rise, the country’s total debt and liabilities rose to Rs 45.470 trillion by the end of March 2021, up Rs 2.666 trillion, or 6.2 percent a year earlier, according to the State Bank of Pakistan (SBP).

Meanwhile, the government’s debt to the International Monetary Fund (IMF) rose to 1.164 trillion rupees from 1.071 trillion rupees.


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