Pakistan moves to repay $3.45bn UAE loans as Saudi deposit provides temporary reserve support

Pakistan is pressing ahead with arrangements to repay about $3.45 billion to the United Arab Emirates as part of previously agreed financial commitments, even as external financing pressures weigh on the country’s foreign exchange reserves.

According to officials, the repayment plan includes an immediate payment of $450 million, followed by two scheduled tranches of $2 billion on April 17 and $1 billion on April 23. The liabilities stem from loans extended since the late 1990s and subsequently rolled over at an estimated interest rate of around 6.5%.

In parallel, the State Bank of Pakistan confirmed receiving a $2 billion deposit from Saudi Arabia, part of a broader $3 billion financial support package aimed at easing pressure on Pakistan’s external account. The inflow is expected to provide short-term support to the country’s foreign exchange reserves.

Despite the inflow, the central bank reported a significant decline in reserves during the week ended April 10, 2026. Official foreign exchange holdings fell by $1.32 billion to $15.08 billion, primarily due to the repayment of $1.426 billion against a Pakistan sovereign Eurobond.

Addressing the issue during a weekly briefing, Foreign Office spokesperson Tahir Andrabi clarified that the repayment arrangements with the UAE were initiated well before the recent escalation in tensions between Iran and the United States.

He stressed that the financial obligation should not be linked to ongoing geopolitical developments in the Middle East, noting that discussions on the repayment of funds had been underway for some time.

The spokesperson also underscored Pakistan’s longstanding relationship with the UAE, describing it as a trusted partner with deep-rooted historical, cultural, religious, and economic ties. He added that Pakistan has consistently condemned any aggression against the UAE and remains committed to supporting regional stability through diplomatic channels.

The clarification comes at a time when Pakistan is actively exploring additional external financing avenues, including potential support from strategic partners such as China and Saudi Arabia, to manage near-term debt obligations and stabilise its reserve position.