The State Bank of Pakistan (SBP) on Saturday confirmed that the government has repaid $2 billion in deposits to the United Arab Emirates, adding to pressure on the country’s external financing position.
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According to an SBP spokesperson, the amount had been placed as a safe deposit with the central bank. The repayment reportedly included an interest component of around 6 per cent.
The development comes shortly after Saudi Arabia agreed to extend the maturity of its $3 billion deposit held with the SBP, providing temporary relief to Pakistan’s foreign exchange reserves.
Earlier this week, the central bank also confirmed receipt of $2 billion from Saudi Arabia, credited on April 15, 2026, helping stabilise reserves in the short term.
However, analysts warn that the repayment to the UAE, along with recent external debt servicing — including a $1.3 billion Eurobond — could widen Pakistan’s financing gap.
Finance Minister Muhammad Aurangzeb said the government is exploring multiple financing options, including Eurobonds, Islamic sukuk, and commercial borrowing, to replace expiring deposits and maintain reserve levels.
Speaking on the sidelines of meetings hosted by the International Monetary Fund and the World Bank, Aurangzeb noted that Pakistan’s reserves currently cover around 2.8 months of imports, a level he described as critical for macroeconomic stability.
He added that while no formal request has been made to modify Pakistan’s $7 billion IMF programme, adjustments could be considered depending on the economic impact of the ongoing Middle East conflict.
The IMF board is expected to approve the next tranche of funding in the coming weeks, potentially unlocking nearly $1.3 billion under its lending programmes.
