China has agreed to reschedule $1.8 billion worth of loans to help Pakistan manage its financial needs linked to the International Monetary Fund (IMF) program. These loans include concessional loans and preferential buyer credits, which are offered on easier terms than regular loans.
Pakistan had originally asked China for relief on a total of $3.4 billion. However, the agreement covers only a part of that amount. Loans under buyer’s credit were not included in the restructuring deal.
According to the new plan, Pakistan will repay the rescheduled amount over two years — from July 2025 to June 2027. While interest payments will continue, the delay in principal repayments will reduce the financial burden and give Pakistan more breathing space in managing its economy.
This agreement is expected to support Pakistan’s efforts to improve its foreign exchange reserves, which are projected to reach $14 billion by June 2025. The move also aligns with the country’s broader strategy to meet IMF targets and manage nearly $20 billion in debt payments that are due in the coming months.
By easing repayment terms and strengthening reserves, the rescheduling will help reduce financial pressure on Pakistan’s economy. It shows continued support from China and helps Pakistan stay on track with its IMF program, which is crucial for restoring economic stability.
This step is seen as a positive sign for Pakistan’s financial outlook as it tries to balance debt obligations while working toward long-term recovery and growth.
