By Iftikhar Mashwani
Islamabad: Pakistan has decided to repay a $2 billion loan obtained from the United Arab Emirates, according to official sources.
The funds, which were held as a deposit with the State Bank of Pakistan, are expected to be returned to Abu Dhabi by the end of this month. Pakistan had been paying approximately 6% interest on the amount. In previous years, the UAE routinely rolled over the deposit annually, but since late 2025, extensions have been granted only for short periods.
Sources indicate that in December 2025, the UAE first extended the deposit for one month and then for an additional two months. More recently, the Emirati authorities have requested immediate repayment, reportedly influenced by evolving geopolitical tensions in the Middle East following the US-Israel conflict with Iran.
Earlier, this year, the UAE had agreed in principle to a short-term rollover of the $2 billion deposit. This understanding was reached after Ishaq Dar contacted senior UAE officials. The extension was granted until April 17, 2026.
Previously, the deposit had been rolled over in smaller intervals: $1 billion matured on February 16 and another $1 billion on February 22, both extended for one month. Pakistan had initially sought a two-year rollover but later revised its request for shorter extensions.
The UAE had also rolled over the same $2 billion in January for one month after its maturity. Meanwhile, a separate third tranche of $1 billion is scheduled to mature in July 2026.
Overall, the Abu Dhabi Fund for Development has placed $3 billion with Pakistan’s central bank in three tranches. Two of these, each worth $1 billion, matured in January and were temporarily extended, while the third remains due later this year.
For the current fiscal year, Pakistan is seeking rollovers totaling around $12 billion in external deposits.
This includes approximately $9 billion expected from Saudi Arabia and China—$5 billion and $4 billion respectively—alongside the $3 billion from the United Arab Emirates.
