Pakistan Debt Repayment: Pakistan has announced its decision to repay the entire $3.5 billion loan owed to the United Arab Emirates (UAE) by the end of April 2026. This move ends speculation regarding the loan’s future, as confirmed by a senior cabinet minister.
The repayment schedule has been set with $450 million due on April 11, $2 billion on April 17, and the remaining $1 billion on April 23. This decision comes amidst geopolitical tensions, notably the US-Israel-Iran conflict, which accelerated the repayment process.
Initially, the UAE had rolled over $2 billion of the debt for one month at a 6.5% interest rate, despite Pakistan’s request for a two-year extension at a reduced rate of 3%. The UAE’s reluctance to extend the terms further prompted Pakistan to prepare for full repayment.
Historically, the UAE has been a significant financial supporter of Pakistan, providing substantial loans since 2018. However, the current repayment plan reflects Pakistan’s efforts to maintain its foreign exchange reserves and adhere to the $7 billion IMF programme requirements.
Looking ahead, Pakistan’s economic strategy includes boosting exports and attracting foreign investment, which have declined in recent years. The government aims to double exports over the next three years to exit the IMF programme, despite current challenges.
Published in SouthAsianDesk, April 4, 2026
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