diff --git a/refs.c b/refs.c
index fcae5dddc6..00e72a2abf 100644
--- a/refs.c
+++ b/refs.c
@@ -1806,8 +1806,10 @@ static int refs_read_special_head(struct ref_store *ref_store,
 	int result = -1;
 	strbuf_addf(&full_path, "%s/%s", ref_store->gitdir, refname);
 
-	if (strbuf_read_file(&content, full_path.buf, 0) < 0)
+	if (strbuf_read_file(&content, full_path.buf, 0) < 0) {
+		*failure_errno = errno;
 		goto done;
+	}
 
 	result = parse_loose_ref_contents(content.buf, oid, referent, type,
 					  failure_errno);
diff --git a/t/t1403-show-ref.sh b/t/t1403-show-ref.sh
index b50ae6fcf1..66e6e77fa9 100755
--- a/t/t1403-show-ref.sh
+++ b/t/t1403-show-ref.sh
@@ -266,4 +266,14 @@ test_expect_success '--exists with directory fails with generic error' '
 	test_cmp expect err
 '
 
+test_expect_success '--exists with non-existent special ref' '
+	test_expect_code 2 git show-ref --exists FETCH_HEAD
+'
+
+test_expect_success '--exists with existing special ref' '
+	test_when_finished "rm .git/FETCH_HEAD" &&
+	git rev-parse HEAD >.git/FETCH_HEAD &&
+	git show-ref --exists FETCH_HEAD
+'
+
 test_done