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China’s SAFE provides $1 billion deposit loan to shore up Pakistan’s foreign exchange reserves in July 2021 (Linked to Record ID#92626, 97845)
| Funder | China State Administration of Foreign Exchange (SAFE) |
|---|---|
| Recipient Organization | Government of Pakistan |
| Country | Pakistan |
| Start Date | Jul 23, 2021 |
| End Date | Aug 31, 2029 |
| Duration | 2,961 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 96216 |
Grant Description
China’s SAFE provides $1 billion deposit loan to shore up Pakistan’s foreign exchange reserves in July 2021 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 of May 31, 2022, the Government of Pakistan’s total amount outstanding under multiple deposit loans from SAFE was $4 billion.
Staff Comments
1. The borrowing terms of the July 2021 loan are unknown. For the time being, AidData assumes that the same borrowing terms from the July 2020 loan (an interest rate of 12-month LIBOR plus a 1% margin) also applied to the July 2021 loan. 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
- 44th Session QUESTIONS FOR ORAL ANSWERS AND THEIR REPLIES
- Govt requests $2b loan rollover
- Pakistan requests China to roll over its USD 6.3 billion debt
- China rolls over $2bn loan for a year 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.
All Grantees
Government of Pakistan
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