Says any attempt to present the transaction otherwise is erroneous and misleading
Foreign Ministry spokesperson Tahir Andrabi spoke today, Thursday March 26, at a press briefing. PHOTO: SCREENGRAB
The Ministry of Foreign Affairs on Saturday rejected what it called a “misleading and unfounded” comment regarding the United Arab Emirates’ (UAE) financial deposits held with the State Bank of Pakistan (SBP), terming the matter a “routine financial transaction.”
The statement followed a senior minister’s announcement on Friday that the government had decided to return the $3.5 billion debt owed to the UAE within the month, ending speculation about the debt status. Abu Dhabi had previously only extended the deferral of this amount by one month.
🔊PR No.9️⃣1️⃣/2️⃣0️⃣2️⃣6️⃣
Pakistan rejects misleading comments on UAE financial deposits, reaffirms strong partnership with UAE pic.twitter.com/0RCfCEbmea
— Ministry of Foreign Affairs – Pakistan (@ForeignOfficePk) April 4, 2026
According to the statement released by FO today, X said the deposits were made under bilateral trade agreements that reflect the UAE’s strong support for Pakistan’s economic stability and prosperity.
“As per mutually agreed terms, the Government of Pakistan, through the SBP, is currently in the process of returning matured deposits to the UAE. This is a routine financial transaction, and any attempt to portray it otherwise is wrong and misleading,” FO pointed out.
Read: Pakistan to repay $3.5 billion in UAE debt this month
The statement further highlighted the long-standing fraternal partnership between Pakistan and the UAE, based on trust and strategic cooperation in areas such as trade, investment, defense and people-to-people ties. He noted that this relationship has “withstood the test of time and grown stronger with each passing year.”
The people of Pakistan, the statement added, “warmly cherish the pivotal role played by the late Sheikh Zayed bin Sultan Al Nahyan, in forging this enduring friendship, as well as his special affection for Pakistan.”
Concluding the statement, FO affirmed Pakistan’s full commitment to further strengthen this enduring partnership for a shared and prosperous future.
The Express PK Press Club reported in January that the United Arab Emirates had rolled over two loans of $1 billion each, maturing on January 16 and 22, for just one month. Pakistan had asked for a two-year renewal and an interest rate of around 3%. But the United Arab Emirates then renewed it at the old conditions, an interest rate of 6.5%.
Under the IMF’s $7 billion program, the UAE, Saudi Arabia and China had pledged to maintain their combined cash deposits of $12.5 billion with the SBP at least until the program expires in September next year.
Read also: No demand for repayment of UAE’s $2 billion loan, SBP governor tells NA panel
In December, State Bank of Pakistan Governor Jameel Ahmad had asked the UAE government to roll over the $2.5 billion debt over two years and cut the interest rate by almost half.
Subsequently, Prime Minister Shehbaz Sharif also requested the UAE President to extend the repayment period. The prime minister said the UAE had agreed to roll over the debt, but did not provide further details.
The UAE provided $2 billion to Pakistan in 2018 for one year, but Pakistan was unable to repay the amount and has since requested refinancing every year. Later, the UAE provided another $1 billion loan in 2023 to help Pakistan meet external financing needs related to the IMF bailout plan.
Early last month, SBP Governor Jameel Ahmad said the UAE was not demanding repayment of the $2 billion loan, but rather rolling it over in a monthly amount. But it now emerges that the UAE has asked Pakistan to repay its money, which was initially only given for a year.
In December, Governor Ahmad asked the UAE government to roll over $2.5 billion in debt over two years and cut interest rates by almost half. Subsequently, Prime Minister Shehbaz Sharif also requested the UAE President to extend the repayment period. The prime minister said the UAE had agreed to roll over the debt, but did not provide further details.
Read: UAE renews $2 billion Pak loan for one month
Pakistani authorities said the government would return $450 million on April 11, $2 billion on April 17, and another $1 billion on April 23. They said they were making arrangements to pay the debt.
However, it was possible that the money would be paid from the $16.4 billion foreign exchange reserves held by the central bank.
In total, Pakistan will repay $4.8 billion in debt in April, including $1.3 billion in Eurobonds on April 8.
