Pakistan to repay UAE's $3.5 billion loan, ending rollovers

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Pakistan to repay UAE’s $3.5 billion loan, ending rollovers

April 4, 2026

ISLAMABAD,— Pakistan plans to repay a $3.5 billion loan to the United Arab Emirates before the end of April, The Nation Pakistan reported.

The UAE first provided Pakistan with a $2 billion deposit in 2018, originally set for one year. Islamabad was unable to meet that deadline and has requested annual rollovers ever since.

The UAE later added another $1 billion in 2023 to support Pakistan’s struggling finances. A separate $450 million loan dates back to 1996-97, also originally issued for one year.

Pakistan’s government has now scheduled three separate payments to settle the full amount.

The $450 million will be paid on April 11, followed by $2 billion on April 17, and the remaining $1 billion on April 23, according to The Nation.

Islamabad had requested a two-year rollover at a reduced interest rate of around 3%.

The UAE, however, declined and maintained the existing rate of 6.5%. In recent months, rollover conditions had already grown stricter.

The UAE shifted from its usual annual extensions to shorter durations, at one point rolling over the deposit for just one month, then two more months, pushing repayment deadlines into mid and late April.

UAE’S ultimatum: Pakistan Warned Over Iran Stance as $2 Billion at Stake. CNN-News18 channel.

For the current fiscal year, Pakistan is working to roll over roughly $12 billion in external deposits.

That includes approximately $5 billion from Saudi Arabia and $4 billion from China, along with the $3 billion UAE facility.

The government will use its foreign exchange reserves to repay the UAE. As of March 27, 2026, Pakistan’s total liquid foreign reserves stood at $21.79 billion, the State Bank of Pakistan said.

Of that total, the central bank held $16.38 billion, while commercial banks held $5.41 billion. During the week ending March 27, the State Bank’s reserves rose by $6 million.

UAE President Sheikh Mohamed bin Zayed Al Nahyan visited Pakistan in December 2025 on an official state visit, meeting with Prime Minister Muhammad Shehbaz Sharif to strengthen diplomatic ties between the two nations.

The leaders reviewed regional and international matters of shared concern, underlining the need to back efforts aimed at advancing peace, security, and stability across the region and beyond.

(With files from The Nation Pakistan)