China has extended the repayment period of a $2 billion loan to Pakistan by one year, providing crucial financial relief, the finance ministry confirmed on Saturday.

Initially due on March 24, the loan’s repayment has been deferred to support Pakistan’s economic stability and recovery efforts, according to an official statement.

“This extension will help Pakistan sustain its foreign exchange reserves and enhance financial stability,” the statement added.

China remains a key economic partner for Pakistan, offering financial assistance and investments, particularly through the China-Pakistan Economic Corridor (CPEC).

The extension comes at a time when Pakistan is facing economic challenges, including a balance of payments crisis, while engaging in negotiations with international lenders for additional financial support.

Officials believe the deferment will ease immediate repayment pressures, allowing the government to focus on economic stabilization.

Meanwhile, earlier this week, Pakistan and the International Monetary Fund (IMF) began discussions for the first review of the $7 billion Extended Fund Facility (EFF) secured last year.

According to the Ministry of Finance, an IMF delegation, led by Nathan Porter, met with Finance Minister Muhammad Aurangzeb in Islamabad to assess the country’s overall economic situation.

During the meeting, Pakistan reaffirmed its commitment to fiscal discipline and economic reforms as part of ongoing talks with the global lender.

Finance Minister Aurangzeb briefed the IMF delegation on the country’s macroeconomic conditions, revenue collection, and structural reform progress, emphasizing Pakistan’s dedication to fulfilling the conditions of its $7 billion loan program.