Pakistan is set to return $2 billion to the United Arab Emirates (UAE) by the end of April 2026. The funds, held as a deposit with the State Bank of Pakistan (SBP), had previously been rolled over for short-term periods. The repayment comes as the UAE faces economic challenges linked to regional conflicts.
The Pakistani government has been paying about six percent interest on the deposit. Traditionally, the UAE allowed annual rollovers, but recent extensions were limited to monthly arrangements.
Deputy Prime Minister Ishaq Dar negotiated a temporary rollover until April 17, 2026, after discussions with senior UAE officials. However, the UAE has now requested the full return of the funds.
This $2 billion is part of a larger $3 billion package from the Abu Dhabi Fund for Development, provided in three tranches. Two of the tranches were briefly rolled over earlier this year, while the remaining $1 billion tranche is set to mature in July 2026.
Pakistan is also pursuing rollovers for nearly $12 billion in external deposits during the current fiscal year. This includes $9 billion from Saudi Arabia and China. Officials say these funds are crucial to maintain foreign reserves and stabilize Pakistan’s economy amid global financial pressures.
Authorities emphasize that timely repayments and negotiations on external deposits are critical for Pakistan’s international credibility and economic stability. The government is coordinating with the SBP and foreign partners to ensure smooth transactions.
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The repayment highlights Pakistan’s commitment to meeting its international financial obligations while managing domestic economic challenges. Analysts say these measures are part of broader efforts to safeguard Pakistan’s financial stability and maintain investor confidence during a period of global uncertainty.
