Pakistan Prepares for $4.8 Billion in External Repayments by June, Including $3.5 Billion to UAE

Pakistan is set to repay $4.8 billion in external obligations by June, with a significant portion of this amount—$3.5 billion—owed to the United Arab Emirates (UAE). This repayment plan follows Islamabad’s decision to return $2 billion to Abu Dhabi by the end of the month, which had been deposited with the State Bank of Pakistan (SBP) and accrued interest. The country has also secured over $5 billion in financial support from two allied nations to assist with its external financing needs.

Details of the Repayment Plan

According to reports from local media, Pakistan’s repayment strategy includes the return of $2 billion to the UAE, which was previously held as a deposit with the SBP. This deposit has been generating approximately 6 percent interest for Pakistan. The repayment is part of a broader obligation that totals $4.8 billion, which the country aims to settle by June. Additionally, a $1.3 billion Eurobond is maturing this week, further intensifying the short-term repayment pressure on the nation. The financial landscape for Pakistan remains challenging, as it navigates these obligations while seeking to stabilize its economy.

Changes in UAE’s Financial Support

Historically, the UAE has rolled over deposits for Pakistan on an annual basis. However, recent geopolitical tensions have prompted a shift in this approach. Since December 2025, the UAE has shortened rollover periods, initially extending them for just one month and then for two months. This change reflects the tightening financial conditions in the region, particularly in light of the escalating situation in the Middle East following the US-Israel conflict with Iran. The UAE’s request for the immediate return of funds underscores the urgency of the situation, leading to negotiations between Pakistani officials and UAE authorities.

Official Statements on the Repayment

In response to concerns regarding the repayment of the UAE debt, Pakistan’s foreign office has characterized the transaction as routine. On April 4, officials dismissed reports suggesting otherwise, labeling them as “misleading and unfounded.” The foreign office emphasized that the repayment is a standard financial transaction and that the deposits were made under bilateral commercial agreements. This statement aims to reassure stakeholders of the UAE’s ongoing support for Pakistan’s economic stability and prosperity.

Future Financial Strategies

For the current fiscal year, Pakistan is actively seeking to roll over approximately $12 billion in external deposits. This includes significant amounts from Saudi Arabia and China, with expectations of $9 billion from these two nations. The ongoing negotiations and financial arrangements are crucial for Pakistan as it strives to manage its external financing needs while ensuring economic stability in a challenging global environment. The government’s proactive approach in securing financial support from friendly countries highlights its commitment to addressing these pressing financial obligations.

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