Pakistan makes major debt repayment to UAE as officials cite efforts to maintain financial stability and investor confidence
Pakistan has made a $2 billion payment to the United Arab Emirates as part of its external debt obligations, the State Bank of Pakistan confirmed Saturday, in a move officials say underscores efforts to maintain financial discipline amid ongoing economic strain.
Finance ministry officials said the repayment is part of scheduled debt servicing aimed at stabilizing the country’s external accounts.
“We have made a repayment of $2 billion to the UAE as part of our scheduled debt servicing,” a finance ministry official said, adding that the remaining $1 billion is expected to be paid on April 23.
Officials also confirmed that Pakistan has repaid a separate $450 million loan dating back 30 years to the UAE, signaling continued efforts to settle legacy obligations.
While acknowledging that such large repayments may temporarily pressure foreign exchange reserves, authorities said contingency arrangements are in place to manage liquidity and maintain currency stability.
Pakistan has also recently raised $500 million through Eurobond issuance after a four-year gap, offering a three-year maturity with an annual return of 6.975%.
Officials said Saudi Arabia has provided $2 billion in financial support, with an additional $1 billion expected within a week, alongside projected oil financing assistance of about $1 billion during the current fiscal year.
They also pointed to expectations of a $1.21 billion tranche from the International Monetary Fund next month, pending approval by the IMF executive board following a staff-level agreement.
Financial analysts say the repayments are important for sustaining investor confidence and maintaining relationships with key bilateral partners, particularly Gulf states that have historically supported Pakistan’s external financing needs.
Officials described the measures as part of broader efforts to stabilize the economy and reinforce Pakistan’s credibility in international capital markets.
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