Islamabad: Pakistan is reeling under a severe financial crisis. Their efforts to secure a bailout by the International Monetary Fund (IMF) have hit a roadblock now with the organization demanding to know the details of Chinese loans to Pakistan.
Reports say that Pakistan assured IMF that there is no overlapping between the IMF bailout and Chinese Pakistan Economic Corridor (CPEC).
China has tightened its stranglehold over Pakistan, especially in the last two years, after both the countries signed half a dozen projects worth $6.2 billion. Pakistan has taken commercial loans worth another $6.2 billion.
Moreover, China has deposited $2 billion in State Bank of Pakistan.
Pakistan has been undergoing a huge economic crisis. Its foreign reserves have dwindled and only reserves worth for less than a year’s purchase are left.
The crisis was triggered when the United States decided to cut off foreign aid to Pakistan after the US lost patience with Pakistan’s reluctance to stop its support to terrorism. The US also sees Pakistan as a safe haven for terrorists responsible for the long-drawn-out war in Afghanistan.
According to the US, the South Asian country is supporting terrorists who are killing American forces in Afghanistan.
Last year, US cut yearly aid worth $300 million.
Pakistan, to avert a financial breakdown, has been desperately seeking loans from many countries. Saudi had lent over $6 billion to the nation.
