Narrative
Full Description
Project narrative
On June 27, 2020, 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. The loan carried the following terms: a 1-year maturity (final maturity date: June 27, 2021), a 1-year grace period, and an interest rate of 12-month LIBOR plus a 1% margin. On June 27, 2021, the $500 million SAFE deposit loan from 2020 was repaid and reissued (i.e. 'rolled over') with a maturity date of June 27, 2022. One year later, on June 27, 2022, the $500 million SAFE deposit loan from 2021 was repaid and reissued (i.e. 'rolled over') with a maturity date of June 27, 2023. The Government of Pakistan announced in early June 2023 that it intended to repay and rollover the loan on June 27, 2023. Then, on June 27, 2023, the $500 SAFE deposit loan from 2022 was repaid and reissued (i.e. 'rolled over) with a maturity date of June 27, 2024.
Staff comments
1. AidData has estimated the all-in interest rate by adding 1% to average 12-month LIBOR in June 2020 (0.596%). 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).