China’s SAFE provides $500 million deposit loan to shore up Pakistan’s foreign exchange reserves in June 2019

On June 29, 2019, China’s State Administration of Foreign Exchange (SAFE) provided a $500 million loan to State Bank of Pakistan in order to shore up the country’s foreign exchange reserves (as captured via Project ID#92088). The loan carried the following terms: a 1-year maturity (final maturity date: June 29, 2020), a 1-year grace period, and an interest rate of 12-month LIBOR plus a 1% margin. SAFE made a $500 million deposit (loan disbursement) in the State Bank of Pakistan on June 29, 2019. Then, on June 29, 2020, the $500 million SAFE deposit loan from 2019 was repaid and reissued (i.e. 'rolled over') with a maturity date of June 29, 2021. One year later, on June 29, 2021, the $500 million SAFE deposit loan from 2020 was repaid and reissued (i.e. 'rolled over') with a maturity date of June 29, 2022. Then, on June 29, 2022, the $500 million SAFE deposit loan from 2021 was repaid and reissued (i.e. 'rolled over') with a maturity date of June 29, 2023. The Government of Pakistan announced in early June 2023 that it intended to repay and rollover the loan on June 29, 2023.

Additional details

1. The all-in interest rate was calculated by adding 1% to the average, 12-month LIBOR rate in June 2019 (2.277%). 2. Until 2018, all SAFE loans were managed by the State Bank of Pakistan (SBP). However, during the 2018-2019 fiscal year, the loans were reclassified and are now under the aegis of the Economic Affairs Division (EAD)

Number of official sources

4

Number of total sources

13