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Pakistan Seeks $3.3 Billion Loan from China to Stabilize Economy

Loan request part of Islamabad’s efforts to boost foreign reserves and prepare for upcoming IMF talks amid economic challenges.

by Muhammad Arham
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Pakistan has formally requested a $3.3 billion loan from China in a bid to support its struggling economy and bolster foreign exchange reserves, official sources revealed on Tuesday.

According to senior government officials, the request was made during high-level talks between Islamabad and Beijing as part of efforts to secure additional funding ahead of negotiations with the International Monetary Fund (IMF) for a new bailout package. The loan is expected to come through China’s State Administration of Foreign Exchange (SAFE) deposits and commercial bank financing.

The development comes at a time when Pakistan faces mounting fiscal challenges, with dwindling reserves, high external debt repayments, and inflationary pressures putting immense strain on the economy.

Finance Minister Muhammad Aurangzeb recently visited China to discuss economic cooperation, where the loan request was high on the agenda. Officials say Pakistan hopes the funding will help bridge its external financing gap and improve investor confidence.

China has been a longstanding economic partner of Pakistan, providing billions of dollars in loans and investments, particularly under the China-Pakistan Economic Corridor (CPEC) initiative.

If approved, the $3.3 billion loan would likely be disbursed in phases over the next fiscal year.

Analysts say Pakistan’s reliance on bilateral support remains critical as it transitions to a more sustainable economic model. However, they also caution that increased borrowing, without structural reforms, could deepen long-term vulnerabilities.

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