Pakistan has secured short-term financial breathing space after reaching an in-principle agreement with the United Arab Emirates to roll over a $2 billion deposit, easing immediate external financing pressure ahead of critical economic negotiations. Officials say the move stabilizes reserves and signals continued bilateral support during sensitive fiscal discussions.
The extension will run until April 17, 2026, at an interest rate of 6.5 percent, according to officials familiar with the arrangement. The previous one-month rollover was nearing expiration, raising concerns about liquidity stability. Formal approval from Emirati authorities is pending but expected soon, with Pakistani officials describing the situation as manageable.
The development comes as Islamabad prepares for its third review with the International Monetary Fund under a $7 billion Extended Fund Facility program. Successful completion could unlock a $1 billion tranche, making continued financial backing from bilateral partners crucial for maintaining investor confidence and demonstrating macroeconomic stability.
Deputy Prime Minister and Foreign Minister Ishaq Dar personally contacted senior Emirati officials this week to secure the extension, according to diplomatic sources. Authorities stressed that rollover duration ultimately depends on the depositor, but assured that discussions remain positive and the financial arrangement is under control.
The funds originate from the Abu Dhabi Fund for Development, which has placed $3 billion with the State Bank of Pakistan in three tranches. Two deposits maturing in January were already extended for one month, while another $1 billion tranche is scheduled to mature in July 2026.
For the current fiscal year, Pakistan is seeking rollover commitments totaling about $12 billion from friendly countries, including major deposits from Saudi Arabia and China. Officials plan to request longer extensions from partners after the IMF review, hoping improved economic indicators will strengthen negotiation leverage.
