Pakistan is pinning hopes that China will continue to ease its payments pressure by extending loans as concerns rise about the nation becoming the next emerging market to default.
(Bloomberg) — Pakistan is pinning hopes that China will continue to ease its payments pressure by extending loans as concerns rise about the nation becoming the next emerging market to default.Â
The nation plans to repay a $300 million loan to China on Friday and another $1 billion loan will be rolled over by June 30, according to central bank Governor Jameel Ahmad. Pakistan also returned a separate $1 billion loan to China recently, he said.Â
The South Asian nation will receive the rolled over amount of $1 billion today or on Monday, according to the governor.Â
This comes as odds are rising the nation will fail to restart its loan program with the International Monetary Fund that expires at the end of June. The country has pledged to repay its debt and faces about $23 billion of external debt payments for the fiscal year that starts in July.
Dollar bonds due in April 2024 fell for the fifth straight day, with the notes quoted at about 50.21 cents on the dollar. The rupee was little changed at 287.2 rupees a dollar.Â
China has extended loans annually to Pakistan for many years. The governor expects debt of $2.3 billion to be rolled over in June after Chinese banks extended another $2 billion in March.Â
(Adds return of rolled over amount in third paragraph)
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