Pakistan Arranges $4.8bn Repayments as UAE Deposit Return Tightens Financial Outlook
Islamabad: Pakistan is facing increased pressure on its external payments as a $1.3 billion Eurobond is set to mature this week, adding to the country’s short-term financial obligations, official sources revealed on Monday.
According to sources, the government has arranged to repay $4.8 billion in external liabilities by June 2026, including $3.5 billion owed to the United Arab Emirates (UAE) under multiple financial facilities. As part of these commitments, Islamabad has decided to return $2 billion to Abu Dhabi by the end of the current month. This amount had been deposited with the State Bank of Pakistan (SBP) and carried an interest rate of around 6%. The repayment comes at a time when Pakistan is managing tight external financing conditions.
The situation has been further complicated by changing financial dynamics, as the UAE — which had historically rolled over such deposits annually — has recently extended them only for shorter durations. Sources indicate that the request for repayment is linked to evolving geopolitical tensions in the Middle East following the US-Israel conflict with Iran. Despite these pressures, Pakistan has reportedly secured assurances exceeding $5 billion in financial support from friendly countries to help stabilize its external position. Officials maintain that the repayment of UAE deposits is a routine transaction under bilateral agreements, while the country continues efforts to secure rollovers of nearly $12 billion from key allies, including Saudi Arabia and China, during the current fiscal year.
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