Active Development AidData Chinese Aid

China’s SAFE provides $500 million deposit loan to shore up Pakistan’s foreign exchange reserves in 2008

$500K USD

Funder	China State Administration of Foreign Exchange (SAFE)
Recipient Organization	State Bank of Pakistan (SBP)
Country	Pakistan
Start Date	Jun 01, 2008
End Date	Jul 05, 2030
Duration	8,069 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`92401`

Grant Description

China’s SAFE provides $500 million deposit loan to shore up Pakistan’s foreign exchange reserves in 2008 In June 2008, China’s State Administration of Foreign Exchange (SAFE) provided a $500 million deposit loan to State Bank of Pakistan (SBP) in order to shore up the country’s foreign exchange reserves.

📋 Loan / Grant Terms

💰 Loan Amountcarried the following terms: a 6-year (estimated) maturity

The loan was repayable semi-annually.

According to the SBP, the outstanding balance of this loan was $300 million on June 30, 2011, $200 million on June 30, 2012, and $100 million on June 30, 2013.

📋 Staff Comments

1. The Fiscal Year 2013 Annual Report of SBP identifies ‘two long-term deposits of USD 500 million each received from the State Administration Foreign Exchange (SAFE) China in January 2009 (rolled-over in January 2013) and June 2012 carrying interest at six months LIBOR plus 100 bps and twelve months LIBOR plus 100 bps respectively, both payable semi-annually. These deposits of USD 500 million each have been set off against the rupee counterpart receivable from the Federal Government and have been covered under Ministry of Finance (MoF) Guarantees dated February 7, 2013 and June 29, 2012 whereby the MoF has agreed to assume all liabilities and risks arising from the Group's agreement with SAFE China. Further, this also includes a deposit of USD 500 million received from SAFE in June 2008 carrying interest at six months LIBOR plus 100 bps payable semi-annually. The outstanding balance of this deposit is USD 100 million as on June 30, 2013 (2012: USD 200 million). This deposit is the direct liability of the [SDP].’ 2. AidData has estimated the final maturity date of the loan to be June 2014 (based on the repayment schedule outlined in Staff Note 1).

📚 Sources & References

Pakistan’s Debt and Liabilities-Summary
Annual Report Performance Review 2012-2013
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS
Public Debt
President’s visit: China to announce $500 million support
To the rescue: Another debt rollover to ease pressure on reserves
Financial Statement of SBP and its Subsidiaries
Pakistan Debt Policy Statement 2010-11
Pakistan’s Debt and Liabilities-Summary
Ch 9: Consolidated Financial Statements of SBP and its Subsidiaries, 2013-2014 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.