Cashless Pakistan asks for another year to repay Chinese loans

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Debt-ridden Pakistan has asked its all-weather ally, China, to take another year to pay off 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.”

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

Previously bankrupt PakistanRussia’s debt problems escalated when China refused to restructure its $ 3 billion debt.

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 sovereign debt “danger zone” with combined 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 have grown to 45.470 trillion at the end of March 2021, an increase of 2.666 trillion Or 6.2% 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 from 1.071 trillion

This story was published from the news agency tape without text changes.

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