Bank of China provides $200 million loan in 2000 to shore up Pakistan's foreign exchange reserves (Linked to Project ID#54154, 54155)

Between the Government of Pakistan’s Fiscal Year 1997 (FY97) and Fiscal Year 1998 (FY98), Bank of China (BOC) provided three separate deposit loans to the State Bank of Pakistan (SBP) in order to shore up the country’s foreign exchange reserves. The first loan (captured via Project ID#54153), which was issued in FY97, was worth $200 million and it carried an initial maturity of 2 years and an interest rate of 8.87% (or LIBOR plus a 1% margin). However, it was rolled over three times and given a revised maturity date of May 2005. The second loan (captured via Project ID#54154), which was issued in FY97, was worth $150 million and it carried an initial maturity of 2 years and an interest rate of 8.32% (or LIBOR plus a 1% margin). However, it was rolled over three times and given a revised maturity date of February 2005. The third loan (captured via Project ID#54155), which was issued in FY98, was worth $150 million and it carried an initial maturity of 1 year and an interest rate of 8.08% (or LIBOR plus a 1% margin). It was rolled over four times and given a revised maturity date of February 2005. None of these loans were repaid on their revised maturity dates in 2005. In fact, SDP did not make its first principal repayment to the Bank of China until the first quarter of FY08. SBP repaid $100 million of principal and $16.5 million of interest in FY08. It repaid $200 million of principal and $58 million of interest in FY09. It was not until FY11 that SDP’s debts to the Bank of China were fully repaid.

Additional details

1. According to the SBP, ‘these relatively high-cost [deposit loans] were mobilized in 1998 when Pakistan was facing acute shortage of forex reserves, and were thereafter rolled-over repeatedly.’ 2. Although the loan commitment took place between FY97 and FY98, AidData has coded the commitment year as 2000 because the loan was rolled over after its initial 2-year maturity. 3. AidData has not yet created four separate records for the three $200 million rollover loans that were issued by Bank of China (due to the fact that their commitment dates and maturity dates could not be identified). This issue warrants further attention.

Number of official sources

4

Number of total sources

7