Pakistan has repaid a $2 billion sum to the United Arab Emirates, the State Bank spokesperson confirmed. The amount was previously held as a “safe deposit” in Pakistan’s account and has now been fully returned. The move is being viewed as a step towards restoring financial credibility and honoring international commitments.
Loan Repayment
According to Ministry of Finance sources, the UAE had requested the return of the funds in light of its current financial policies and global economic conditions. The amount was earlier subject to a 6% interest rate. The UAE had been rolling over the deposit annually, but in December 2025 it was extended only for one month and later for two months, after which the government decided to proceed with full repayment.
Financial Support from Saudi Arabia
The repayment came at a time when Pakistan received significant financial assistance from Saudi Arabia. Sources indicate that $2 billion has recently been received from Riyadh, while an additional $3 billion deposit has also been assured. This support helped facilitate the repayment process to the UAE.
Impact on Economy
Economic experts say that repaying the loan will reduce the burden of interest payments on the national treasury. While the $2 billion outflow may temporarily affect foreign exchange reserves, inflows from Saudi Arabia are expected to offset the impact. The development reflects Pakistan’s ability to meet its external financial obligations.
