Islamabad, June 29, 2025: Pakistan and China have finalized $3.7 billion in commercial loan agreements this week, pushing the country’s foreign exchange reserves back to $12.4 billion — a sharp recovery from last week’s critically low $8.9 billion.
Sources confirmed that Industrial and Commercial Bank of China (ICBC) and Bank of China signed $1.6 billion in deals on Friday, with funds set to be released by Monday, the final day of FY 2024-25. These inflows are expected to help Pakistan meet its IMF target of closing the fiscal year with $14 billion in gross reserves.
Earlier delays had raised concerns about disbursement, triggering backdoor diplomatic efforts. Deputy Prime Minister Ishaq Dar personally intervened, initiating talks with Chinese officials on May 19. His engagement led to a successful $2.1 billion syndicated loan agreement with three Chinese banks.
The syndicated loan—equivalent to 15 billion RMB—was recently repaid and refinanced under new terms. The loan is now extended for three more years, with contributions of 9 billion RMB from China Development Bank, 3 billion RMB each from Bank of China and ICBC.
These funds, disbursed in RMB, have been reflected in the central bank’s reserves. The final $1.6 billion in pending loans has also been confirmed, with disbursement expected shortly.
The most recent deal includes a $1.3 billion refinancing by ICBC. The loan, originally issued two years ago, carries a floating interest rate averaging 7.5%.
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With this $3.7 billion loan boost from China, Pakistan moves closer to stabilizing its external sector and meeting key IMF conditions.
