Pakistan has repaid the full $3.45 billion it owed the United Arab Emirates, with the State Bank of Pakistan saying the final leg of the payment was completed this week. According to the central bank, $1 billion was repaid to the Abu Dhabi Fund for Development on April 23, while $2.45 billion had already been returned to the UAE last week, closing out the entire amount.
The repayment lands at a delicate moment for Islamabad, which has been trying to protect foreign exchange reserves while meeting a heavy external payment schedule. Pakistan’s official reserve data showed the SBP’s holdings at $15.0795 billion on April 10, before edging up to $15.0976 billion in the week ended April 17. Total liquid foreign reserves stood at $20.6285 billion as of April 17, with the rest held by commercial banks.
That backdrop matters. Earlier this month, reporting indicated the UAE deposits were considered important to Pakistan’s wider external financing picture under its IMF programme, which relies in part on continued support, rollovers, or fresh inflows from key bilateral partners including China, Saudi Arabia and the UAE.
The pressure on reserves had already been visible. SBP data showed a sharp fall in reserves in the week ended April 10, and contemporaneous reporting linked that drop mainly to repayment of a $1.426 billion sovereign Eurobond. In other words, the UAE repayment did not arrive in isolation; it came as Pakistan was already absorbing large external outflows and looking for ways to avoid a fresh squeeze on dollar holdings.
The IMF angle is still hanging over the story as well. The Fund said in May 2025 that it had completed the first review of Pakistan’s Extended Fund Facility, a move that allowed the authorities to draw about $1 billion and credited the country with stronger programme implementation and improving external conditions. That doesn’t answer every immediate financing question in April 2026, but it does explain why markets watch reserve moves and bilateral repayments so closely.
For now, the central bank’s message is simple and fairly blunt: the UAE repayment is done. What investors and officials will be watching next is whether replacement inflows, rollovers from other partners, and multilateral support are enough to keep reserves from slipping again in the weeks ahead.
