China has agreed to reschedule $1.8 billion in loans given to Pakistan. This means Pakistan will now have more time—up to two extra years—to repay these loans. The decision is a big relief for Pakistan, which has been facing financial pressure and working to meet the requirements of its loan agreement with the International Monetary Fund (IMF).
The rescheduled amount includes loans given by the Chinese government and its Exim Bank. These loans were originally due for repayment between mid-2025 and mid-2027. With this new agreement, Pakistan will continue paying interest but can delay the return of the original loan amount.
This move helps reduce Pakistan’s immediate financial burden. It gives the country some breathing space as it tries to manage its economy and improve foreign exchange reserves. It also supports Pakistan’s goal to stay on track with its ongoing IMF programme, which runs until 2027.
China has supported Pakistan in the past with similar rescheduling of loans. This new step shows continued cooperation between the two countries. However, experts believe that while this gives short-term relief, Pakistan will still need to plan carefully for long-term economic stability and manage its external debt more effectively in the future.