ISLAMABAD: The United Arab Emirates (UAE) has agreed in principle to grant a rollover of a $2 billion deposit for a short-term period of just two months, at a time when the one-month extension was set to expire in four days, The News has learnt.
This assurance was given to Pakistan when Deputy Prime Minister/Foreign Minister Ishaq Dar contacted the UAE high-ups this week. A top official confirmed that the UAE has agreed to the short-term rollover until April 17, 2026. The development comes ahead of Pakistan’s upcoming review talks with the International Monetary Fund (IMF) for the third review and the release of the $1 billion fourth tranche under the $7 billion Extended Fund Facility (EFF).
“The UAE has granted the rollover on a short-term basis at a rate of 6.5 percent,” top official sources said, adding that formal approval from the concerned quarter was awaited and expected to be received anytime.
Replying to a query, the Foreign Office spokesperson stated that he was not aware of the context or content of the statements made at the Standing Committee on Finance by officials of the Ministry of Finance. He could only confirm that the Deputy Prime Minister/Foreign Minister was seized of the matter and was playing a very positive role in coordination and consultation with relevant authorities in the UAE. “The tenure of the rollover is the prerogative of depositor. Through the positive role of DPM/FM, we can say that the rollover is assured and the tenure is not linked. Since the rollover continues, this matter remains in control,” the spokesperson said.
He also referred to statements made by the finance minister that there was no external finance gap in terms of Pakistan’s profile, including with reference to the country’s engagement with the IMF.
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. It has been conveyed to the UAE that after the IMF review talks, Islamabad will again approach the authorities to seek a longer-term rollover of the deposits. In January, the UAE had rolled over $2 billion for one month after the amount matured. A third tranche of $1 billion is due to mature in July 2026.
During December, the Ministry of Finance had prepared working papers and drafted a letter to the UAE government seeking rollover of the full $3 billion for one year. The government had hoped the rollover would be secured in advance, as in previous instances, but the UAE initially agreed to only a one-month extension.
Last week, officials from the Ministry of Finance were unable to give a clear assurance to a parliamentary committee regarding the rollover of full $3 billion deposit, placing responsibility on the Ministry of Foreign Affairs. The finance minister told the committee that Pakistan has provided the IMF with a clear external financing plan and that talks with the UAE authorities were continuing. He said bilateral arrangements were on track and that any change in the situation would be communicated.
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. In December, Saudi Arabia agreed to extend the maturity of its $3 billion deposit with the State Bank of Pakistan by another year. Under a 2021 agreement, Riyadh had placed $3 billion with Pakistan’s central bank.
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.
