Pakistan to Repay UAE’s $2 Billion Loan by Month-End: Sources

Islamabad-(Mudassar Iqbal/Web Desk))-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.

Sources revealed that Pakistan had been paying approximately 6% interest on the deposit. In previous years, the UAE routinely rolled over the amount annually. However, in December 2025, the extension period was shortened, first by one month and later by two months.

Insiders further disclosed that the UAE has now requested the immediate repayment of the funds, citing the evolving geopolitical situation in the Middle East, particularly tensions linked to the US-Israel conflict with Iran.

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Earlier in February, the UAE had agreed in principle to grant a rollover of a $2 billion deposit for a short-term period of just two months, The News learnt.

This assurance was given to Pakistan when Deputy Prime Minister Ishaq Dar contacted the UAE high-ups this week. A top official confirmed that the UAE had agreed to the short-term rollover until April 17, 2026.

Earlier, the UAE had rolled over $2 billion for just one month, with $1 billion maturing on February 16 and the remaining $1 billion on February 22.

The Pakistani government had requested the UAE to roll over the deposit for two years and subsequently submitted a fresh request for extension of the facility.

In January, the UAE had rolled over $2 billion for one month after the amount matured. A third tranche of $1bn is due to mature in July 2026.

According to officials, the Abu Dhabi Fund for Development has placed $3 billion with the State Bank of Pakistan in three separate tranches. Two tranches of $1 billion each matured on January 17 and January 23 and were rolled over for one month, while the third tranche of $1 billion is due to mature in July and will be taken up for rollover closer to its maturity.

For the current fiscal year, Pakistan is seeking rollover of approximately $12 billion in external deposits, including around $9 billion from Saudi Arabia and China — $5 billion from Saudi Arabia and $4 billion from China — in addition to the $3 billion placed by the UAE.