The $2 billion loan was due in March and has been extended for one year, Geo News which first reported the news said, citing sources in the Pakistan finance ministry. Beijing had communicated the decision to Islamabad, it added.

Pakistan’s cash-strapped economy is struggling to stabilise from a financial crisis and secured a $3 billion standby arrangement from the International Monetary Fund last summer.

Pakistan’s vulnerable external position means that securing financing from multilateral and bilateral partners will be one of the most urgent issues facing the next government, ratings agency Fitch said last week.