The State Bank of Pakistan (SBP) confirmed on Friday that it has successfully completed the repayment of $3.45 billion in deposits to the United Arab Emirates. This decisive move follows the government’s recent decision to settle the external financing facility rather than pursuing a rollover, a strategy officials describe as a necessary step to uphold “national dignity.” While the repayment results in a significant drawdown of foreign exchange reserves, the central bank maintains that the country’s financial position remains stable due to recent inflows from other bilateral partners. These funds were originally extended by the UAE in 2019 to stabilize Pakistan’s balance of payments. The successful settlement of this high-profile debt underscores Islamabad’s commitment to meeting its international obligations despite the economic pressures and regional volatility currently impacting global capital markets.
🚨BREAKING: State Bank of Pakistan repaid loans of $3.45 billion to UAE
— The Daily CPEC (@TheDailyCPEC) April 24, 2026
Highlights
- $3.45 billion fully returned to the UAE as of April 23, 2026.
- $1 billion repaid to the Abu Dhabi Fund for Development (ADFD) this Thursday.
- $2.45 billion settled with the UAE during the previous week.
- Total foreign reserves stood at $20.63 billion as of April 17, prior to the final ADFD settlement.
- Pakistan received a $3 billion deposit from Saudi Arabia this month, with the final $1 billion tranche arriving on April 21.
The decision to return the funds marks a significant shift in Pakistan’s debt management strategy. For the past seven years, Islamabad had consistently secured rollovers for such facilities; however, after failing to reach a new agreement with the UAE in March, the government opted for full repayment. This move effectively closes a chapter of external financing support that began during the 2019 economic crisis.
State Bank of Pakistan repaid deposit of US$ 1 billion to Abu Dhabi Fund for Development (ADFD) UAE on 23April2026. Deposits of $2.45 billion were repaid last week. This completes the repayment of total deposits of $3.45 billion to UAE.
— SBP (@StateBank_Pak) April 24, 2026
Market analysts suggest that while the repayment places immediate pressure on the net reserves, the timely $3 billion support from the Kingdom of Saudi Arabia has provided a critical cushion. The SBP’s proactive disclosure aims to calm investor nerves regarding near-term financing gaps. However, experts warn that external financing risks remain a key vulnerability, particularly as volatile energy prices—driven by the ongoing conflict in the Middle East—continue to strain the country’s import bill. Moving forward, the government is expected to rely heavily on continued IMF-supported reforms and increased local production to maintain the current stabilization effort.
