Pakistan takes $1.5 billion loan from China to repay debt to Saudi Arabia


China has agreed to immediately provide $1.5 billion financing line to Pakistan to help the country repay the $2 billion Saudi Arabia debt, reports said.

Out of $2 billion, Pakistan will reportedly return the $1 billion on Monday and the remaining $1 billion in January.

Sources, however, said that this time around, China has not given the loan from its State Administration of Foreign Exchange, commonly known as SAFE deposits, nor has it extended a commercial loan.

Instead, this time, China is providing the $1.5 billion loan by augmenting the size of 2011 bilateral Currency-Swap Agreement (CSA), by an additional 10 billion Chinse Yuan or around $1.5 billion, a report in The Express Tribune reported sources as saying. This has increased the size of the overall trade facility to 20 billion Chinese Yuan or $4.5 billion