Pakistan has made arrangements to meet its external financial obligations of $4.8 billion by June 2026, which includes $3.5 billion payable to the United Arab Emirates (UAE) through three different facilities, official sources told Geo News on Monday.
$2 Billion Repayment to the UAE
The federal government has decided to return $2 billion to Abu Dhabi by the end of this month. This amount had previously been placed with the State Bank of Pakistan (SBP), earning the country approximately 6% interest.
According to sources, Islamabad has also secured assurances of more than $5 billion in financial support from two friendly countries to help manage its external financing needs.
Eurobond Maturity and Short-Term Pressure
Sources noted that a $1.3 billion Eurobond, issued for a 10-year term, is maturing this week and will be repaid, adding to near-term repayment pressures.
In previous years, the UAE had rolled over such deposits annually. However, in December 2025, the facility was extended only for short durations—first for one month, then two months—reflecting tighter financial conditions.
Regional Tensions and Immediate Repayment
The UAE recently requested the immediate return of funds amid the evolving Middle East situation following the US-Israel conflict with Iran. Earlier, after Deputy Prime Minister Ishaq Dar’s engagement with UAE authorities, the UAE had agreed in principle to roll over the $2 billion deposit for a short-term period of two months, now extended until April 17, 2026.
Pakistan Prepares $1.3 Billion Eurobond Repayment as IMF Talks Approach
Previously, two tranches of $1 billion maturing on February 16 and February 22 were rolled over for one month each. 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 tranches maturing in January were rolled over for a month, while the third will be addressed closer to maturity.
Government Clarification and Financial Perspective
On April 4, the Foreign Office rejected “misleading and unfounded” reports regarding the return of UAE debt, stating that the repayment is a routine financial transaction. The FO clarified that these funds were placed with the central bank under bilateral commercial agreements and reflect “the UAE’s strong support for Pakistan’s economic stability and prosperity.”
The ministry further emphasized that the government, through the SBP, is returning the matured deposits to the UAE according to mutually agreed terms, and any portrayal otherwise is “erroneous and misleading.”
Efforts to Roll Over External Deposits
For the current fiscal year, Pakistan is seeking the rollover of around $12 billion in external deposits, including approximately $5 billion from Saudi Arabia and $4 billion from China, in addition to the UAE funds. These measures aim to maintain Pakistan’s external financial stability and ease short-term repayment pressures.
