Pakistan has secured crucial breathing room on its external financing front as the United Arab Emirates (UAE) agreed to roll over $2 billion in deposits for two months.
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This extension, until April 17, comes at an interest rate of 6.5% and follows high-level outreach by Deputy Prime Minister Ishaq Dar.
Timely Relief Amid Short-Term Debt Pressures
The rollover addresses $2 billion in UAE deposits held by the State Bank of Pakistan (SBP) that were due for repayment in recent weeks. Initial uncertainty surrounded the routine extension, but assurances from UAE officials provided relief.
Pakistan’s external debt remains heavily short-term, with significant exposure to “friendly” countries like the UAE, Saudi Arabia, and China—making such rollovers vital for reserve stability.
Boost Ahead of IMF Review
The move strengthens Pakistan’s position as an IMF mission arrives later this month for the third review of the ongoing program.
Finance Minister Muhammad Aurangzeb had earlier confirmed no financing shortfall, noting active rollover talks with the UAE.
This extension eases immediate FX pressures in a stabilizing economy, supporting ongoing efforts to manage external obligations effectively.