Active Development AidData Chinese Aid

Bank of China provides $150 million loan in 2000 to shore up Pakistan's foreign exchange reserves (Linked to Record ID#54153, 54155)

$150M USD

Funder	Bank of China (BOC)
Recipient Organization	State Bank of Pakistan (SBP)
Country	Pakistan
Start Date	Jan 01, 2000
End Date	Jun 10, 2032
Duration	11,849 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`54155`

Grant Description

Bank of China provides $150 million loan in 2000 to shore up Pakistan's foreign exchange reserves 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 Record 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 Record 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 Record 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.

📋 Staff Comments

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.’ See https://www.sbp.org.pk/reports/annual/arFY03/Domestic%20and%20External%20Debt.pdf2. 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.
AidData has not yet created four separate records for the four $150 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.
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

Annual Report: Domestic & External Debt (2000-2001) (Vol-I)
Rapprochement Across the Himalayas: Emerging India-China Relations Post Cold War
Domestic and External Debt
Domestic and External Debt
Domestic and External Debt
Domestic and External Debt
FY 2009 Annual Report: Chapter 6 Domestic and External Debt
Pakistan’s Debt and Liabilities-Summary
Pakistan IMF Letter of Intent Nov 4 2000
Pakistan: Staff Report for the 2000 Article IV Consultation and Request for Stand-By Arrangement 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

State Bank of Pakistan (SBP)

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