current affairs MCQ #6105

What is the primary reason Pakistan's CPEC debt repayments have become a major economic concern by 2024?

current affairs MCQ #6105

  1. Question 1

    Q1. What is the primary reason Pakistan's CPEC debt repayments have become a major economic concern by 2024?

    • A) China raised interest rates on CPEC loans unilaterally
    • B) Pakistan defaulted on two major CPEC energy payments
    • C) The Pakistani rupee appreciation made repayments more expensive
    • D) CPEC energy project repayments in dollars create a significant drain on Pakistan's foreign exchange reserves

    Answer: CPEC energy project repayments in dollars create a significant drain on Pakistan's foreign exchange reserves

    Explanation: CPEC energy project agreements require capacity payments and profit repatriation in US dollars, creating a significant pressure on Pakistan's foreign exchange reserves. This circular debt issue and dollar outflow became a critical challenge for Pakistan's economic management by 2023-2024.