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Pakistan to Repay Matured Deposits to UAE
April 6, 2026
Pakistan is set to repay $3.5bn in matured loan deposits to the UAE. The repayment is notable because Pakistan’s central bank governor had previously indicated bilateral partners would continue rolling over such debt. The UAE deposits, described as being placed under bilateral commercial agreements, will be returned through the State Bank of Pakistan. Pakistan’s dollar reserves stood at $16.4bn as of late-March, and the country also faces a $1.3bn bond payment due in April. Pakistan holds roughly $12bn in total debt from friendly nations, primarily China, Saudi Arabia, and the UAE, all of which have historically rolled over loans at maturity. This development coincides with rising energy costs from the Middle East conflict, which prompted authorities to scrap fuel subsidies and raise petrol and diesel prices. Economists warn that the development could create a critical financial gap and push Pakistan into a precarious position. The country will likely need to revisit its IMF bailout discussions, as the reserve shortfall could affect agreed dollar reserve targets. The IMF had recently noted improving conditions in Pakistan, reaching a preliminary agreement on a third tranche of its bailout program, but the UAE repayment adds fresh uncertainty to that fragile stabilization.
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