Post by : Bianca
Haleem
Pakistan has finalized the repayment of a USD 3.45 billion loan to the United Arab Emirates (UAE), fulfilling its commitments to the Abu Dhabi Fund for Development (ADFD), as announced by the State Bank of Pakistan (SBP) this Friday.
The central bank revealed that a conclusive payment of USD 1 billion was executed on April 23, 2026, while the remaining USD 2.45 billion had already been settled the prior week. Consequently, Pakistan has eliminated its total debt owed to the UAE.
These loans were initially granted by the UAE to support balance-of-payments, with multiple rollovers since 2018. This year, repayment terms transitioned from annual to monthly before Pakistan opted for full settlement.
To adhere to the repayment timeline, Pakistan utilized recent financial inflows, including a USD 2 billion deposit from Saudi Arabia, part of a broader USD 3 billion assistance package.
This repayment alleviates the external debt challenges faced by Pakistan and bolsters economic management within the International Monetary Fund (IMF) framework. The country's foreign exchange reserves, which were approximately USD 16 billion, provided essential support for the repayment.
Initial reports indicated that Pakistan planned to pay off around USD 3.5 billion by the end of April after the UAE requested early funds return. However, the State Bank confirmed the repayment of USD 3.45 billion, suggesting that a previously overdue amount of USD 450 million may not have been part of the recent payment.
This milestone represents a crucial advancement in Pakistan’s initiative to stabilize its economy and effectively manage external debts amid ongoing regional and financial difficulties.
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