Pakistan has decided to fully repay $3.5 billion in loans taken from the United Arab Emirates within the current month, signaling improved external liquidity management and renewed confidence in the country’s foreign exchange position.
According to official sources, Pakistan has finalized the repayment plan, with $450 million scheduled to be paid this week. The remaining $3 billion will be cleared in two installments — $2 billion on April 17 and $1 billion on April 23.
The loans include legacy borrowings dating back to 1996–97, as well as $2 billion borrowed in 2018 and an additional $1 billion placed as deposits by the UAE in 2023. These facilities were rolled over multiple times at an annual interest rate of 6.5%.
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Authorities confirmed that the repayments will not put pressure on Pakistan’s reserves. The State Bank of Pakistan currently holds $16.4 billion in foreign exchange reserves, which officials say are adequate to meet all near-term external obligations.
In addition to the UAE loan settlement, Pakistan is also arranging payment for a €1.3 billion Eurobond, further ensuring its commitment to meeting international debt repayments on time.
Economic experts believe the move could strengthen Pakistan’s credibility in global financial markets, support currency stability, and improve investor sentiment amid ongoing fiscal and structural reforms.
The full repayment of UAE loans is being viewed as a positive development for Pakistan’s economy, particularly at a time when the government is focused on reducing reliance on rollovers and enhancing financial discipline.
