Pakistan Fully Repays $3.45 Billion Loan to UAE as Saudi Support Averts Crisis
ISLAMABAD — April 24, 2026 — Pakistan has completed the full repayment of $3.45 billion in deposits to the United Arab Emirates, the State Bank of Pakistan (SBP) announced on Friday, April 24, settling all outstanding liabilities after securing timely financial support from Saudi Arabia to offset the shock to its foreign reserves.
The central bank confirmed in a social media post that it repaid a final tranche of $1 billion to the Abu Dhabi Fund for Development (ADFD) on Thursday, April 23, following earlier repayments of $2.45 billion last week .
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“This completes the repayment of total deposits of $3.45 billion to UAE,” the SBP stated .
UAE Called in Loan Amid Middle East Crisis
The repayment marks the closure of financial arrangements that had been renewed annually since 2018 but came under sudden pressure when Abu Dhabi requested the return of its funds early amid the escalating regional conflict triggered by the US-Israel war on Iran .
The UAE had previously agreed in principle to extend the deposits, but the evolving security situation in West Asia prompted a shift in policy, leaving Islamabad scrambling to arrange alternative funding sources .
The deposits originated from a $2 billion loan taken by the government of former prime minister Imran Khan in 2018 to stabilize foreign exchange reserves, followed by an additional $1 billion deposit in 2023 .
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Saudi Arabia Steps in with $3 Billion Package
To manage the repayment pressure, Riyadh swiftly provided a $3 billion financial support package. Pakistan received $2 billion from Saudi Arabia on April 15 and an additional $1 billion on April 21 as the second tranche of the new deposit arrangement .
Prime Minister Shehbaz Sharif welcomed the Saudi support, stating: “We are grateful to the Kingdom of Saudi Arabia for its timely assistance, which has strengthened Pakistan’s economic stability” .
Finance Minister Muhammad Aurangzeb confirmed the arrangement during the IMF-World Bank Spring Meetings in Washington, noting that the Saudi deposits would help build foreign exchange reserves .
Economic Implications
The SBP reported that with the final repayment completed, foreign exchange reserves have increased by $136 million during the current financial year, and the current account remains in surplus .
The repayment comes as part of broader efforts to stabilize Pakistan’s external account under a $7 billion International Monetary Fund (IMF) program, which requires building foreign exchange reserves above $18 billion by June . Officials in March failed to secure an agreement with the UAE to roll over the facility, marking the first such failure in seven years and raising concerns about near-term financing gaps .
Commercial banks hold approximately $5.49 billion, while the SBP’s reserves stand at $15.10 billion .
The government has also made other external payments, including a $1.43 billion Eurobond that matured on April 8, 2026 . Officials noted that remittances during Eid and foreign exchange carried by pilgrims traveling for Hajj are expected to further strengthen reserves in the coming weeks .
Khalid Mahmood, an economist based in Lahore, described the repayment as “a significant financial milestone” but noted that external financing risks remain a key vulnerability, particularly amid volatile energy prices and constrained global capital markets .
SOURCES / INPUTS
Daily Pakistan: SBP returns complete deposits of $3.45 billion to UAE
Profit by Pakistan Today: Pakistan closes UAE deposit liabilities with $3.45 billion repayment
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