By Staff Reporter
ISLAMABAD: Pakistan has lined up repayments totaling $4.8 billion in external obligations by the end of June, including $3.5 billion owed to the United Arab Emirates across three separate facilities, local media reported on Monday.
The schedule comes as the federal government prepares to return $2 billion to Abu Dhabi by the end of April. The funds had been held as a deposit at the State Bank of Pakistan, on which Islamabad was paying interest of about 6%. The repayment reflects a broader effort to manage near-term financing pressures, including the maturity of a $1.3 billion Eurobond issued for 10 years that falls due this week.
Officials said Islamabad has also secured assurances of more than $5 billion in fresh financial support from two friendly countries to help cover its external financing needs over the coming months.
The UAE portion of the repayments marks a departure from past practice. Abu Dhabi had routinely rolled over such deposits on an annual basis. In December 2025, however, the facility was extended only for short periods — first one month, then two — amid tightening global financial conditions. More recently, the UAE requested the immediate return of the funds in light of the evolving situation in the Middle East following the US-Israel conflict with Iran.
Earlier this year, after Deputy Prime Minister Ishaq Dar held discussions with UAE authorities, Abu Dhabi agreed in principle to roll over the $2 billion deposit for a further two months. That extension runs until April 17. Two earlier tranches of $1 billion each, which matured on Feb. 16 and Feb. 22, were rolled over for one month. A further $1 billion tranche remains due in July 2026.
The Abu Dhabi Fund for Development has placed a total of $3 billion with the State Bank of Pakistan in three tranches. Two that matured in January were rolled over for one month, while the third will be handled closer to its maturity date, officials said.
Pakistan’s Foreign Office moved quickly to counter any suggestion that the repayments signalled financial strain. In a statement issued April 4, the ministry rejected what it called “misleading and unfounded” media reports about the return of UAE funds. The deposits were placed with the central bank under bilateral commercial agreements and demonstrated “the UAE’s strong support for Pakistan’s economic stability and prosperity,” the Foreign Office said.
“The government, through the State Bank of Pakistan, is returning the matured deposits to the UAE pursuant to mutually agreed terms,” the statement continued. “This is a routine financial transaction, and any attempt to portray it otherwise is erroneous and misleading.”
For the current fiscal year, Pakistan is seeking rollovers on roughly $12 billion in external deposits. That total includes about $9 billion from Saudi Arabia and China — $5 billion and $4 billion, respectively — in addition to the UAE facilities.
The repayments and fresh support assurances underscore the tightrope Islamabad continues to walk as it balances maturing commercial debt, bilateral deposits and the need to maintain access to liquidity from key Gulf and Asian partners. With the Eurobond maturity adding immediate pressure, the arrangements provide a measure of breathing room through the first half of the year.
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