Pakistan has formally asked China to accelerate the refinancing of a $1.3 billion commercial loan, with officials expecting the funds to be released later this month after the remaining terms are finalized, sources in the Ministry of Finance told ProPakistani.

According to the sources, Pakistani and Chinese authorities are in ongoing discussions to complete the refinancing process as soon as possible. The expected inflow is likely to provide support to Pakistan’s foreign exchange reserves after the country made $2.2 billion in external debt repayments during July.

The refinancing is linked to a $1.3 billion Chinese commercial loan that Pakistan repaid last month as part of its scheduled external debt servicing.

Separately, officials said the State Bank of Pakistan (SBP) plans to purchase more than $7 billion from the interbank foreign exchange market during the current fiscal year.

The officials said these dollar purchases will help meet Pakistan’s external debt repayment obligations while also strengthening the SBP’s foreign exchange reserves.