The State Bank of Pakistan (SBP) confirmed on Friday that the country has finished repaying $3.45 billion in deposits to the United Arab Emirates (UAE). This total includes a $1 billion payment made to the Abu Dhabi Fund for Development on April 23 and $2.45 billion returned the previous week.
“This completes the repayment of total deposits of $3.45 billion to UAE,” the SBP stated via a post on X.
The move was framed as a necessary step to uphold “national dignity,” despite the resulting impact on Pakistan’s foreign exchange reserves.
The funds were originally provided by the UAE in 2019 as external financing support aimed at stabilizing the balance of payments.
The repayment follows a period in March when Islamabad did not reach an agreement with the UAE to roll over the $3.5 billion facility, the first instance in seven years that such a rollover failed to occur, a development that triggered concerns regarding financing gaps in the near term.
Current data from the central bank shows that foreign reserves held by Pakistan stood at $20.63 billion as of April 17.
The reserve position saw movement this month as Pakistan received a $3 billion deposit from Saudi Arabia. This inflow arrived in two parts, with the final $1 billion tranche reaching the SBP on April 21.
While the foreign exchange position faces pressure from these repayments, it remains a component of stabilization efforts tied to reforms supported by the IMF.
