Pakistan Repays UAE $2 Billion Deposit, Seeks New Loans

Pakistan has repaid a $2 billion deposit to the UAE. The country is now seeking new financing options to manage its foreign exchange reserves.
By Newsroom | Finance, Pakistan |

ISLAMABAD – April 19, 2026 – The State Bank of Pakistan (SBP) has officially confirmed the repayment of a $2 billion debt to the United Arab Emirates (UAE). The transaction, finalized recently, involved the return of funds previously held as a deposit with the central bank.

The SBP spokesperson stated that the repayment would not adversely impact Pakistan’s foreign exchange reserves, asserting that the country's external financial position remains stable. This confirmation arrives as Pakistan actively navigates its external financing landscape, utilizing various instruments to manage obligations and sustain reserve levels. The funds from the UAE were reportedly a form of deposit arrangement designed to bolster Pakistan's foreign exchange reserves and external financing capabilities during times of economic pressure.

The repayment to the UAE coincides with Pakistan's pursuit of new financing options to safeguard its foreign exchange reserves, particularly in the context of ongoing International Monetary Fund (IMF) support. Finance Minister Muhammad Aurangzeb, speaking on the sidelines of the IMF/World Bank spring meetings, indicated that the government is exploring avenues such as Eurobonds, bilateral loans from other nations, and commercial debt to offset the impact of the UAE facility's maturity.

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Aurangzeb reiterated that Pakistan is capable of managing all its debt repayments. He noted that the country's reserves currently stand at approximately 2.8 months of import cover, a level he acknowledged as critical for maintaining macroeconomic stability. The minister also touched upon broader economic considerations, including the implications of the ongoing conflict in the Middle East, suggesting a need for Pakistan to consider developing a strategic petroleum reserve and accelerating its transition to renewable energy sources.

Context of Bilateral Support

The $2 billion deposit from the UAE had served as a significant component of Pakistan's external financing strategy. Such arrangements with friendly nations have historically played a crucial role in stabilizing the country's external account and fostering investor confidence, especially during periods of economic reform and engagement with international financial institutions. The repayment signifies Pakistan's fulfillment of its financial commitments to key regional partners who have provided support through these deposit mechanisms.

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The inflow of funds that preceded the UAE repayment underscores a period of active engagement in Pakistan's external financing operations. These combined inflows and outflows highlight the dynamic nature of the country's efforts to manage its financial obligations and maintain a stable economic footing.

Frequently Asked Questions

Q: Did Pakistan repay the $2 billion deposit to the UAE?
Yes, the State Bank of Pakistan confirmed that Pakistan has repaid the $2 billion deposit to the United Arab Emirates. This repayment was completed recently.
Q: Will this repayment affect Pakistan's money reserves?
The State Bank of Pakistan stated that the repayment will not harm the country's foreign exchange reserves. They believe Pakistan's financial position remains strong.
Q: What is Pakistan doing to get more money?
Pakistan is looking for new ways to get money, like Eurobonds and loans from other countries. This is to help keep their money reserves stable, especially while working with the IMF.
Q: How much money does Pakistan have for imports?
Pakistan currently has enough money reserves to cover about 2.8 months of imports. The Finance Minister said this level is important for keeping the economy stable.