Islamabad: Pakistan has finalized arrangements to repay $4.8 billion in external obligations by the end of June 2026, with $3.5 billion earmarked for the United Arab Emirates (UAE) across three separate facilities, official sources told Geo News on Monday.
The repayment includes the return of a $2 billion deposit to Abu Dhabi by the end of April. This amount was previously placed with the State Bank of Pakistan (SBP), on which Pakistan has been paying approximately 6% interest annually.
Sources further revealed that Islamabad has secured assurances of more than $5 billion in financial support from two friendly countries to help meet its external financing needs.
Adding to the near-term pressure, a $1.3 billion Eurobond — originally issued for a 10-year term — is maturing this week and will be repaid as scheduled.
Shift in UAE Rollover Policy
The UAE had previously rolled over its deposits with Pakistan on an annual basis. However, in December 2025, the facility was extended only for short periods — first for one month and then for two months — signaling tighter financial conditions.
According to sources, the UAE has now sought the prompt return of these funds amid the evolving geopolitical situation in the Middle East following the US-Israel conflict with Iran.
Earlier, after engagement by Deputy Prime Minister Ishaq Dar, the UAE had agreed in principle to roll over the $2 billion deposit for two months, with the extension valid until April 17, 2026. Two earlier tranches of $1 billion each (maturing in February) were rolled over for one month, while another $1 billion tranche is due in July 2026.
The Abu Dhabi Fund for Development has placed a total of $3 billion with the SBP in three tranches. Two of these were rolled over for one month after maturing in January, while the third will be handled closer to its maturity date.
Foreign Office Clarification
On April 4, the Foreign Office rejected “misleading and unfounded” media reports regarding the repayment, describing it as a routine financial transaction under bilateral commercial agreements.
“The deposits reflect the UAE’s strong support for Pakistan’s economic stability and prosperity,” the FO stated, adding that the government, through the SBP, is returning the matured deposits in line with mutually agreed terms.
“This is a standard financial matter, and any attempt to portray it otherwise is incorrect and misleading,” the statement concluded.
Broader Financing Picture
For the current fiscal year, Pakistan is seeking rollovers of around $12 billion in external deposits. This includes approximately $9 billion from Saudi Arabia ($5 billion) and China ($4 billion), in addition to the UAE facilities.
The repayments come at a time when Pakistan is working to maintain macroeconomic stability and manage its foreign exchange reserves amid multiple maturing obligations.
