Pakistan repays $2bn to UAE amid ongoing external financing pressures

Pakistan has repaid $2 billion to the United Arab Emirates under maturing bilateral deposits, as the country navigates external financing pressures and debt obligations, a central bank official said on Saturday.

The repayment forms part of a broader $3.5 billion due to the UAE by the end of April, as authorities work to stabilize foreign exchange reserves with support from allied countries and an International Monetary Fund (IMF) program.

The outflow comes at a time when Pakistan’s reserves remain under pressure. As of March 27, foreign exchange reserves stood at $16.4 billion, covering roughly three months of imports. The repayment coincided with $1.4 billion in Eurobond obligations during the same period, highlighting ongoing strain on the country’s balance of payments.

To manage liquidity, Pakistan has relied on financial support from partner countries. Earlier this week, Saudi Arabia deposited $2 billion with the State Bank of Pakistan and agreed to extend the maturity of a separate $3 billion deposit, providing short-term relief to reserves.

Pakistan has also received financial backing from China and other partners as it works to meet conditions under its $7 billion IMF programme, which requires maintaining adequate reserve levels.

Officials have previously described repayments to the UAE as routine transactions under bilateral agreements, although they come amid tighter external conditions and ongoing financing needs.

Looking ahead, Pakistan is exploring a mix of funding options, including Eurobonds, Islamic sukuk, commercial borrowing and bilateral support, to manage upcoming repayments and maintain reserve stability.