- Refunds include 6% interest on deposits in the UAE.
- Saudi Arabia extends deposit maturity support of $3 billion.
- The external financing gap risks widening after repayments.
The State Bank of Pakistan (SBP) on Friday said it has repaid $1 billion to the Abu Dhabi Fund for Development (ADFD), completing the return of $3.45 billion in UAE deposits after settling $2.45 billion last week.
In an article on X, the central bank said the last payment was made on April 23, marking the full repayment of deposits placed by the UAE.
“This completes the repayment of a total of $3.45 billion in deposits in the UAE,” the SBP said.
Earlier, on April 18, the central bank confirmed that the government had returned $2 billion in debt to the UAE. An SBP spokesperson said the amount was kept with the central bank as a secure deposit.
The repayments come as Pakistan deals with pressure on its external financial position, with the funding gap likely to widen following the return of deposits from the UAE, along with a 6% interest payment.
Pakistan also recently repaid $1.43 billion in external debt, including $1.3 billion in Eurobonds.
The development follows an agreement with Saudi Arabia to extend the maturity of a $3 billion deposit placed with the SBP. The central bank had also said earlier this month that it had received $2 billion from the kingdom with a value date of April 15, 2026.
Finance Minister Muhammad Aurangzeb had earlier said Pakistan was considering Eurobonds, loans from other countries and commercial debts to replace the UAE’s lending facility and manage foreign exchange reserves.
“All options are on the table,” Aurangzeb said when asked if the government was in talks with Saudi Arabia for a loan that could replace the UAE facility.
Speaking on the sidelines of the IMF and World Bank spring meetings, he said Pakistan was able to manage all its debt repayments and reserves remained at around 2.8 months of import cover.
Maintaining at least that level, the financial czar said, would be “an important aspect of our overall macroeconomic stability as we move forward.”
“We are studying Eurobonds, Islamic sukuk, dollar-settled rupee-linked bonds,” Aurangzeb said, adding that Pakistan plans to issue Eurobonds this year and is also studying commercial loans.
He also said the shock of the ongoing war in the Middle East meant Pakistan needed to consider building a strategic oil reserve and moving more quickly to renewable energy.
Aurangzeb said Pakistan had not yet requested any additions or changes to its $7 billion IMF loan program due to economic shocks caused by the war in the Middle East, but added that it remained a possible option depending on developments in the coming weeks.
The IMF board is expected to approve the final loan tranche by the end of this month or early next month, which would release just under $1.3 billion through the Extended Financing Facility and the Resilience and Sustainability Facility.
