ISLAMABAD: Pakistan is all set to repay two major external loans worth $3.5 billion during the current month. Islamabad has decided to repay the UAE’s $2 billion deposits, along with 6 percent interest, on April 17. Additionally, $1.3 billion will be repaid upon the maturity of a Eurobond on April 8, 2026.
In total, Pakistan will have to make two major repayments of external loans amounting to $3.5 billion, including principal and markup. Another $1 billion in UAE deposits is scheduled to mature in July 2026. A federal minister in the Shehbaz Sharif-led government confirmed to The News on Friday evening that the government is prepared to repay the UAE deposits on their due date.
“Pakistan might prefer to pay back the entire deposit amount of $3 billion in one go,” said official sources. They added that while the government had made efforts to convince the UAE to roll over the deposits for a longer period, it now prefers to return them given the changing geopolitical situation. “Islamabad is making efforts for bridge financing from other friendly countries, but nothing has been finalized yet,” official sources told The News on Friday.
The News International reported in February 2026 that the UAE had agreed in principle to grant a two-month extension on the rollover of $2 billion in deposits until April 17, 2026. However, the government has now decided to return the amount along with the 6 percent interest payment. Earlier, the UAE had rolled over the $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 a two-year rollover and subsequently submitted a fresh request for extension of the facility.
The Abu Dhabi Fund for Development placed $3 billion with the State Bank of Pakistan (SBP) 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 will become due in July 2026.
In December, Saudi Arabia agreed to extend the maturity of its $3 billion deposit with the SBP 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 rollovers of about $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. With the repayment of these two major external loans, the foreign exchange reserves held by the SBP will be depleted by $3.5 billion. However, there are expectations that Pakistan will receive $1.2 billion from the IMF if its Executive Board approves the completion of the third review and the release of the fourth tranche under the $7 billion EFF programme. The finance ministry, meanwhile, took to “X”, and said: “In response to speculation and commentary in some section of the media regarding the Government of Pakistan’s external flows, it may be noted that Ministry of Finance is continuously monitoring and managing Pakistan’s external flows in order to ensure stable foreign exchange reserves. The Government of Pakistan remains committed to fulfilling all its external obligations.”
