Pakistan Decides to Repay $2 Billion to UAE After Securing Alternative Funding; Friendly Countries Assure Over $5 Billion Support

Islamabad: Pakistan has decided to repay $2 billion to the United Arab Emirates (UAE) after arranging funds from alternative sources, according to official sources.
The repayment is part of Pakistan’s broader strategy to meet its external payment obligations of approximately $4.8 billion by June. Sources indicate that assurances of more than $5 billion in support from friendly countries have strengthened the country’s financial position, enabling the decision to return the deposit held with the State Bank of Pakistan (SBP).
The UAE had earlier provided the funds as a safe deposit to support Pakistan’s balance of payments. The amount was previously subject to rollover arrangements, but recent developments prompted the repayment schedule. Pakistan has been paying around 6% interest on the deposit.
This move comes amid Pakistan’s efforts to manage its external financing needs for the current fiscal year, which include rollovers and fresh inflows from allies such as Saudi Arabia and China. With foreign exchange reserves currently above $21 billion, officials believe the repayment will not severely impact liquidity, though it may widen the external financing gap in the coming months.
The decision reflects improved confidence in alternative funding avenues while maintaining strong bilateral ties with the UAE.