Kamal Ghorui
Pakistan has made arrangements to repay $4.8 billion in external obligations by June, including $3.5 billion payable to the United Arab Emirates through three different facilities, according to a local media report.The development comes after Islamabad decided to return $2 billion to Abu Dhabi by the end of the current month. The amount had been placed with the State Bank of Pakistan (SBP) as a deposit, on which the country has been paying around 6 per cent interest.
According to Geo News, citing official sources, Pakistan has also received assurances of more than $5 billion in financial support from two friendly countries to help manage its external financing needs.A $1.3 billion Eurobond, issued for a 10-year period, is also maturing this week and will be repaid, adding to short-term repayment pressure, reported news agency PTI.
UAE shortened rollover periods after December as regional tensions mounted
The UAE had in the past rolled over such deposits annually. However, in December 2025, the facility was extended only for short durations — first for one month and then for two months — indicating tighter financial conditions.Recently, the UAE sought immediate return of the funds amid the evolving situation in Middle East following the US-Israel war on Iran.Earlier, the UAE had agreed in principle to roll over the $2 billion deposit for a short-term period of two months after Pakistan’s deputy Prime Minister Ishaq Dar engaged with UAE authorities. The rollover was extended until April 17, 2026.Previously, two separate $1 billion tranches maturing on February 16 and February 22 were rolled over for one month. Another $1 billion tranche is due to mature in July 2026.
Foreign office says repayment is routine
The Abu Dhabi Fund for Development has placed a total of $3 billion with the SBP in three tranches. Two tranches that matured in January were rolled over for one month, while the third will be dealt with closer to maturity.On April 4, Pakistan’s foreign office rejected what it called “misleading and unfounded” reports about the return of UAE debt, saying the repayment was a routine financial transaction.“This is a routine financial transaction, and any attempt to portray it otherwise is erroneous and misleading,” the FO said in a statement.The FO added that the deposits were placed with the central bank under bilateral commercial agreements and reflected “the UAE’s strong support for Pakistan’s economic stability and prosperity”.For the current fiscal year, Pakistan is seeking rollover of about $12 billion in external deposits, including around $9 billion from Saudi Arabia and China, $5 billion and $4 billion respectively, in addition to the UAE deposits.
