Pakistan Prime Minister Shehbaz Sharif on Tuesday glorified China for "stepping up" to support Pakistan when the cash-strapped nation was left in the lurch by the lender of the last resort amid a bailout limbo, a media outlet reported.
"The agreement with the IMF has been unusually delayed and China once again came to our rescue," the premier said during a ceremony in Islamabad for signing a memorandum of understanding (MoU) between Pakistan and China for the 1,200 MW Chashma-5 (C-5) nuclear power project.
The country has barely enough currency reserves to cover one month's imports. It had hoped to have $1.1 billion of the funds released in November - but the IMF has insisted on a number of conditions before it makes any more disbursements, Geo News reported.
Consequently, Pakistan hoped China would continue to ease its payments pressure by extending loans as concerns arose that the South Asian nation could become the next emerging market to default.
The nation plans to repay a $300 million loan to China on Friday and another $1 billion loan will be rolled over by June 30, State Bank of Pakistan Governor Jameel Ahmad said earlier. Pakistan also returned a separate $1 billion loan to China recently which was refinanced last week.
"When Pakistan is faced with economic challenges, and we are also engaged with IMF to finalise the ninth review and met all conditions required by the IMF, China once again came to our help," Prime Minister Shehbaz was quoted as saying by the media outlet.
Chinese support comes as odds are that the cash-strapped nation will fail to restart its loan programme -with the lender - that expires at the end of June. The country has pledged to repay its debt and faces about $23 billion of external debt payments for the fiscal year that starts in July.
China has extended loans annually to Pakistan for many years. The central bank expects debt of $2.3 billion to be rolled over in June after Chinese banks extended another $2 billion in March, the media outlet reported.