Pakistan has made arrangements to repay $4.8 billion in external obligations by June, including $3.5 billion payable to the United Arab Emirates (UAE) through three different facilities, official sources told.
The repayment plan follows a federal government decision to return $2 billion to Abu Dhabi by the end of April. The funds had been placed with the State Bank of Pakistan (SBP) as a deposit, earning roughly 6% interest, officials said.
Financial Support from Friendly Countries
According to the sources, Islamabad has also secured assurances of more than $5 billion in financial support from two friendly countries. These funds are expected to help Pakistan manage its external financing requirements in the near term.
Meanwhile, a $1.3 billion Eurobond maturing this week will also be repaid. The bond, issued for a 10-year period, adds to Pakistan’s immediate repayment pressures.
Officials noted that the UAE had previously rolled over such deposits annually. However, in December 2025, the facility was extended only for short durations initially for one month and then for two months reflecting tightening financial conditions.
UAE Demands Early Repayment
The sources revealed that the UAE recently requested the immediate return of funds amid the evolving situation in the Middle East following the US-Israel war on Iran.
Earlier, the UAE had agreed in principle to a short-term rollover of $2 billion after Deputy Prime Minister Ishaq Dar engaged with the UAE authorities. The rollover was extended until April 17, 2026.
Previously, two tranches of $1 billion each, maturing on February 16 and February5 22, were rolled over for one month. Another $1 billion tranche is due to mature in July 2026, according to officials.
The Abu Dhabi Fund for Development has placed a total of $3 billion with SBP in three tranches. Two tranches maturing in January were rolled over for a month, while the third will be addressed closer to its maturity, officials added.
Foreign Office Clarifies Transaction
On April 4, the Foreign Office (FO) rejected “misleading and unfounded” reports about the return of UAE deposits. The FO said the repayment is a routine financial transaction, conducted under bilateral commercial agreements.
“The funds were placed with the central bank under mutually agreed terms. This demonstrates the UAE’s strong support for Pakistan’s economic stability and prosperity,” the FO said in a statement.
The office emphasized that any attempt to portray the repayment as politically motivated is erroneous and misleading. “The government, through SBP, is returning the matured deposits to the UAE pursuant to agreed terms,” it added.
Broader External Financing Strategy
For the current fiscal year, Pakistan is seeking the rollover of around $12 billion in external deposits, including $9 billion from Saudi Arabia and China $5 billion and $4 billion respectively in addition to UAE deposits.
Officials said these measures are part of Pakistan’s ongoing efforts to stabilize its external account and maintain liquidity in the face of global financial uncertainties.
Analysts noted that timely repayment and rollover of deposits are crucial to maintaining investor confidence and sustaining Pakistan’s creditworthiness in international markets. They also highlighted the importance of maintaining strong relations with friendly countries to secure financial support.
Economic Implications
The repayment plan comes amid heightened geopolitical tensions in the Middle East, which have affected global markets and investor sentiment. The situation underscores Pakistan’s vulnerability to external shocks, including regional conflicts and fluctuations in global finance.
Experts suggest that while the repayment does not pose immediate risk to Pakistan’s economy, delays or disruptions in the rollover of deposits could strain liquidity and affect the balance of payments. The government is therefore coordinating closely with international partners to ensure smooth execution of repayments and rollovers.
Officials confirmed that Pakistan is monitoring the situation daily and will provide updates as needed. The government assured that all transactions are transparent and aligned with financial agreements.