Pakistan is set to return a USD 2 billion deposit to the United Arab Emirates, according to media reports released Friday.
The funds were originally provided by the UAE to help stabilize Pakistan’s balance of payments and had been routinely rolled over in the past. However, recent geopolitical tensions in the Middle East, particularly following developments involving the United States and Israel, prompted the UAE to request an early repayment, sources indicated.
The amount was held by the State Bank of Pakistan as part of its foreign exchange reserves. Reports suggest that Pakistan plans to repay the full sum to Abu Dhabi by the end of this month.
Previously, Pakistan paid roughly 6 percent interest on the deposit, and the UAE had typically extended the arrangement annually. This changed in late 2025, when the extension was granted in shorter intervals, first for one month and then for two months, with the latest deadline set for April 17.
During the current fiscal year, Pakistan has relied on around USD 12 billion in external deposits, including contributions from Saudi Arabia, China, and the UAE.
While Pakistan’s reserves exceed USD 21 billion, the repayment could tighten liquidity, potentially increasing the country’s need for additional external financing in the near term.
