According to him, Pakistan’s demonstrated capacity to respect its commitments strengthens mutual trust rather than any tension
Pakistan-UAE flags. Photo: File
The repayment of matured long-term foreign deposits in the United Arab Emirates (UAE) reflects Pakistan’s improved external liquidity position, economic stability and enhanced political credibility, as well as its ability to honor its international obligations without compromising macroeconomic fundamentals, according to financial analysts.
At the end of March 2026, Pakistan’s total liquid foreign exchange reserves stood at approximately $21.79 billion, providing a strong buffer to manage external liabilities. The repayment highlighted the positive trajectory of the country’s external finances, built through sustained reforms and improved capital inflows.
Pakistan’s foreign exchange reserves fell to a multi-year low in 2022, according to official statistics, amid balance of payments pressures and political instability, with the State Bank of Pakistan’s (SBP) assets at one point falling below $7 billion.
“Since then, the Government of Pakistan and the SBP have implemented robust external accounts stabilization measures and macroeconomic reforms, including close engagement with the International Monetary Fund (IMF) and bilateral partners. These efforts have been successful in replenishing external buffers,” according to a financial analyst.
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At the end of June 2025, the SBP’s foreign exchange reserves stood at approximately $14.51 billion, up from approximately $9.39 billion in June 2024. The recovery momentum continued through 2026, with reserves rebounding to levels not seen since before the 2022 crisis. This trend reflects a return of investor confidence and greater stability in the external sector.
The analyst said brotherly ties with the UAE remained non-negotiable and Pakistan’s demonstrated ability to fulfill these commitments strengthened mutual trust rather than any tension.
Earlier on April 4, a Foreign Ministry spokesperson in a statement rejected recent misleading and unfounded comments regarding UAE financial deposits held with the State Bank.
“The deposits were placed as part of bilateral trade agreements, demonstrating the UAE’s strong support for Pakistan’s economic stability and prosperity. Accordingly, in accordance with the mutually agreed terms, the Government of Pakistan, through the SBP, is now returning the overdue deposits to the UAE. This is a routine financial transaction, and any attempt to portray it otherwise is wrong and misleading,” the spokesperson added.
He said Pakistan and the UAE share a long-standing fraternal partnership based on trust and strategic cooperation in the areas of trade, investment, defense and people-to-people ties.
