Completed Mixed AidData Chinese Aid

China’s SAFE provides $1 billion deposit loan to shore up Pakistan’s foreign exchange reserves in July 2020 (Linked to Record ID#96216, 97845)

$1M USD

Funder	China State Administration of Foreign Exchange (SAFE)
Recipient Organization	State Bank of Pakistan (SBP)
Country	Pakistan
Start Date	Jul 23, 2020
End Date	Jul 27, 2030
Duration	3,656 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`92626`

Grant Description

China’s SAFE provides $1 billion deposit loan to shore up Pakistan’s foreign exchange reserves in July 2020 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).

📋 Loan / Grant Terms

💰 Loan Amountcarried the following borrowing terms: a 1-year maturity (final maturity date: July 23

📅 Maturity1 year

⏳ Grace Period1 year

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 of May 31, 2022, the Government of Pakistan’s total amount outstanding under multiple deposit loans from SAFE was $4 billion.

📋 Staff Comments

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.
The EAD Project ID# is CHINA-20.
Media reports suggest that the provision of this loan increased total SAFE deposit loans in Pakistan to $4 billion.

📚 Sources & References

QUARTERLY REPORT ON FOREIGN ECONOMIC ASSISTANCE (July 2020 –March 2021)
PAKISTAN
January 2021 Monthly Bulletin Foreign Economic Assistance
March 2021 Monthly Bulletin
MONTHLY REPORT Foreign Economic Assistance
Pak borrows USD 1 billion from Chinese banks to avoid crisis: Report
Pakistan pays back $1b Saudi loan
PAKISTAN 2021 ARTICLE IV CONSULTATION
SIXTH REVIEW UNDER THE EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY
AND REQUESTS FOR WAIVERS OF APPLICABILITY AND NONOBSERVANCE OF PERFORMANCE CRITERIA AND REPHASING OF ACCESS—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR PAKISTAN
Statistical Supplement: Pakistan Economic Survey
April 2021 MONTHLY REPORT Foreign Economic Assistance, 4 Fiscal Policy and Public Debt
Pakistan borrows $500 million from China to shore up its reserves
Pakistan Economic Survey 2018-19
Pakistan borrows $500 million from China
China to roll over $500m loan to shore up Pakistan's reserves
Status Report July-June 2018-19
Pakistan Economic Affairs Division
Monthly Bulletin Foreign Economic Assistance Sep 2020
Domestic External Debt
November 2017
May 2011 Statistical Review
HE STATE OF PAKISTAN’S ECONOMY - Third Quarterly Report for the year 2017-18
Pakistan Secures $1 Billion SAFE Deposit Deal With China
SBP Annual Report-Statistical Supplement FY 17
Govt shifts China’s $2 bn SAFE deposit to loan category
Did Pakistan borrow $500 million from ICBC to repay old Chinese loan?
State Bank of Pakistan
Revision Study on External Debt Statistics, 03 September 2012
Pakistan borrows another $500m from Chinese bank
China to roll over $500 million loan to Pakistan’s central bank for its foreign currency reserves
Monthly Bulletin Foreign Economic Assistance (September, 2020), 44th Session QUESTIONS FOR ORAL ANSWERS AND THEIR REPLIES 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.