China has helped The Islamic Republic Of Pakistan again by extending a Two Billion Dollar loan. This is well and good news for Pakistan and their citizens because the country is facing critical financial problems. Pakistan was supposed to return this money on time , but China decided to give more time to Pakistan. This will help Pakistan in managing its economy properly.
Why Does Islamic Republic Of Pakistan Need This Loan?
Pakistan’s economy is very weak right now and stands at a critical stage. The country does not have enough dollars to pay for imports & loans. Because of this, the Pakistani rupee is losing value, and prices of things like food and fuel are going up very fastly.
If Pakistan had to return this loan now, the big situation would get worse. The country would lose more foreign exchange reserves, making it even very hard to buy things from other countries in the word. China’s decision to extend the loan means Pakistan can keep its dollars for important needs.
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How Will This Loan Help Pakistan’s Economy?
More Foreign Reserves: Since Pakistan does not have to return this loan immediately, its foreign exchange reserves will stay stable. This is very important for buying goods from other countries in the world.
(PKR)Rupee Stability: When reserves are strong, the Pakistani rupee will not fall too much, helping Pakistan to control inflation.
Investor Trust: If investors see that China is helping The Islamic Republic Of Pakistan, they may feel safe and secure to invest and trade with him, bringing more money into the country.
Time to Fix the Economy: Pakistan now has some time to make good financial decisions and improve its economy again.
Pakistan & China’s Friendship
Pakistan and China have been best friends for a long time. China has supported Pakistan many times especially at the time of crisis , like through the China-Pakistan Economic Corridor (CPEC). This loan rollover shows that China still stands with Pakistan in tough and hard times.
