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ISLAMABAD: The State Bank of Pakistan (SBP) has completed the repayment of a total of $3.45 billion in deposits to the United Arab Emirates, marking a significant development in the country’s external debt obligations and liquidity management.
According to official sources, the central bank repaid $1 billion to the Abu Dhabi Fund for Development (ADFD) on April 23, 2026. This payment follows the settlement of an additional $2.45 billion in deposits to UAE entities earlier in the week, bringing the cumulative repayment to $3.45 billion.
The repayments are part of Pakistan’s ongoing efforts to meet its external financing commitments amid a challenging macroeconomic environment characterized by tight foreign exchange reserves and continued pressure on the balance of payments.
Financial analysts note that the timely retirement of these deposits reflects Pakistan’s intent to maintain credibility with key bilateral partners, particularly Gulf countries that have historically provided critical financial support during periods of economic stress. The UAE, in particular, has remained a major source of financial assistance for Pakistan, often extending deposits to help shore up foreign exchange reserves.
However, the outflow of $3.45 billion within a short span of time is expected to weigh on the country’s already fragile reserve position. While exact reserve figures following the repayments were not immediately disclosed, market observers anticipate a temporary dip that could increase reliance on fresh inflows or rollovers from friendly countries and multilateral lenders.
Economists emphasize that such repayments, while necessary, underline the structural vulnerabilities in Pakistan’s external sector. The country continues to grapple with a persistent current account deficit, subdued export growth, and high external financing needs, all of which contribute to periodic pressure on the rupee and foreign exchange reserves.
In recent months, Pakistan has been actively engaged with international financial institutions and bilateral partners to secure additional funding and stabilize its external accounts. The government has also pursued policy measures aimed at curbing imports, boosting exports, and attracting remittances to ease pressure on reserves.
The completion of repayments to the UAE may also pave the way for renewed financial support or deposit rollovers, a common practice in Pakistan’s dealings with friendly nations. Such arrangements are often crucial in bridging short-term financing gaps and maintaining market confidence.
Despite these challenges, officials maintain that Pakistan remains committed to honoring its external obligations in a timely manner. They argue that disciplined debt servicing is essential to sustaining international credibility and ensuring continued access to external financing.
Looking ahead, the focus is likely to remain on securing fresh inflows, managing the exchange rate, and implementing structural reforms to reduce reliance on short-term external borrowing. Analysts caution that without sustained improvements in export performance and investment inflows, the country could continue to face recurring pressures on its external account.
The latest repayments underscore both Pakistan’s commitment to meeting its obligations and the ongoing challenges in achieving durable external sector stability.
