KARACHI, Apr 18 : Pakistan has returned USD 2 billion it owed in debt to the United Arab Emirates, the country’s central bank said Saturday.
The announcement by the State Bank of Pakistan (SBP) comes two days after Saudi Arabia deposited USD 2 billion, part of the USD 3 billion aid, with the SBP.
“The State Bank of Pakistan (SBP) on Saturday confirmed that the government has returned USD 2 billion in debt to the United Arab Emirates (UAE),” Geo News said, quoting the central bank’s spokesperson.
The amount was kept with the central banks as a safe deposit, the SBP spokesperson said.
The UAE had provided the fund to support the balance of payment, and it was being rolled out until recently.
The UAE recently asked for the immediate return of the funds in the wake of the recent situation in West Asia following the US-Israel war on Iran, Geo News said, quoting sources, in a report earlier in the month.
Saudi Arabia reached an agreement — announced on Friday — with the SBP which allows for an extension in the maturity of a USD 3 billion deposit with it.
On Thursday, the SaudiA Fund for Development deposited USD 2 billion of the USD 3 billion with the State Bank of Pakistan (SBP), bringing a major boost to the country’s skewed foreign reserves.
“The agreement, signed between the SaudiA Fund for Development (SFD) and the State Bank of Pakistan (SBP), provides for the extension in the maturity of a USD 3 billion deposit placed by SFD with the State Bank of Pakistan,” said a post on X by the Ministry of Finance.
The insiders said Pakistan has been paying around 6 per cent interest on the amount it owed to the UAE. In the past, the UAE used to roll over the deposit on a yearly basis. However, in December 2025, the amount was extended first for one month and then for two months until April 17.
For the current fiscal year, Pakistan needed a rollover of approximately USD 12 billion in external deposits, including USD 5 billion from Saudi Arabia, USD 4 billion from China and USD 3 billion placed by the UAE.
According to official figures, Pakistan’s foreign exchange reserves stood at USD 16.4 billion as of March 27, which officials said was sufficient to cover close to three months of imports. The repayment requirement from the UAE was met amid fresh pressure on the country’s external buffers. ()PTI)
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