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China’s SAFE provides $1 billion deposit loan to shore up Pakistan’s foreign exchange reserves in July 2023
| Funder | China State Administration of Foreign Exchange (SAFE) |
|---|---|
| Recipient Organization | Government of Pakistan |
| Country | Pakistan |
| Start Date | Jul 23, 2023 |
| End Date | Aug 11, 2027 |
| Duration | 1,480 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 102320 |
Grant Description
China’s SAFE provides $1 billion deposit loan to shore up Pakistan’s foreign exchange reserves in July 2023 On July 23, 2020, China’s State Administration of Foreign Exchange (SAFE) provided a $1 billion loan to the Government of Pakistan in order to shore up the country’s foreign exchange reserves (as captured via Record ID#92626).
SAFE made a $1 billion deposit (loan disbursement) in the State Bank of Pakistan on or around July 23, 2020.
The loan was provided by SAFE to help the Government of Pakistan repay part of a $3 billion loan to Saudi Arabia, which was contracted to avoid default on its international debt obligations.
This was reportedly the first time that SAFE issued a deposit loan to Pakistan’s federal government rather than its central bank (the State Bank of Pakistan).
In July 2021, the $1 billion SAFE deposit loan from July 2020 was repaid and reissued (i.e. 'rolled over) with a maturity date of July 23, 2022 (as captured via Record ID#96216).
Then, in July 2022, the $1 billion SAFE deposit loan from July 2021 was repaid and reissued (i.e. 'rolled over) with a maturity date of July 23, 2023 (as captured via Record ID#97845).
In July 2023, the $1 billion SAFE deposit loan from July 2023 was repaid and reissued (i.e. 'rolled over) with a maturity date of July 23, 2024 (as captured via Record ID#102320)
Staff Comments
- According to an April 4, 2023 report from the National Assembly of Pakistan, ‘[a]ll of Chinese commercial bank maturities during FY23 will be rolled over. Chinese authorities have assured the rollover of SAFE deposits, refinancing of bank loans and increase in the SWAP line from RMB 30 billion to RMB 40 billion. Government has recently received US$ 700 mn from CDB and further inflows are in pipeline from ICBC.’ 2. June 30, 2023 marked the cessation of the USD LIBOR panel. SOFR then became the dominant interest rate benchmark for USD-denominated borrowings.
- For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
Sources & References
- NATIONAL ASSEMBLY SECRETARIAT (6th Group, 51st Session) “QUESTIONS FOR ORAL ANSWERS AND THEIR REPLIES” to be asked at a sitting of the National Assembly to be held on Wednesday, the 5th April, 2023
- Govt requests $2b loan rollover, 44th Session QUESTIONS FOR ORAL ANSWERS AND THEIR REPLIES
- Govt’s tenure to end on Aug 14, says PM
- China Refinances $1 Billion SAFE Deposit to Pakistan
- China returns $1 billion loan: SBP Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.
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Government of Pakistan
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