China extends $2bln loan repayment for Pakistan

China has granted Pakistan a one-year extension on the repayment of a $2 billion loan, providing much-needed financial relief, the country’s finance ministry announced on Saturday.

Initially due on March 24, the loan repayment has now been deferred, allowing Pakistan to better manage its economic stability and recovery efforts.

"This extension will help bolster Pakistan’s foreign exchange reserves and contribute to financial stability," the ministry stated.

China has consistently played a crucial role in supporting Pakistan’s economy through financial aid and investments, particularly under the China-Pakistan Economic Corridor (CPEC) initiative.

Read more: Pakistan finalises $1bn loan deal with Middle Eastern banks

This loan deferment comes at a critical time as Pakistan grapples with economic challenges, including a balance of payments crisis and ongoing discussions with international lenders for additional financial support.

Officials believe the extension will alleviate immediate repayment concerns, enabling the government to concentrate on stabilizing the economy.