Pakistan loan repayment: has successfully repaid a $2 billion loan to the United Arab Emirates, as confirmed by the State Bank of Pakistan on April 18, 2026. This move is part of the country’s strategic efforts to manage its external debt and stabilize its economy.
The repayment was made from funds held as a safe deposit with the UAE’s central bank. This development follows an agreement between Pakistan and Saudi Arabia to extend the maturity of a $3 billion deposit with the State Bank of Pakistan, reflecting ongoing financial collaborations in the region.
In recent weeks, Pakistan has also repaid $1.43 billion in external debt, including a significant $1.3 billion Eurobond. Finance Minister Muhammad Aurangzeb highlighted the country’s strategy to replace the UAE loan facility with new financial instruments such as Eurobonds, dollar-settled rupee-linked bonds, and Islamic sukuk.
Aurangzeb, speaking at the IMF/World Bank annual spring meetings, emphasized the importance of maintaining a reserve level covering approximately 2.8 months of imports to ensure macroeconomic stability. He also noted the potential for adjustments in the country’s $7 billion IMF lending program, depending on the evolving economic landscape.
Looking ahead, Pakistan continues to explore various financing avenues to bolster its foreign reserves and manage its debt obligations effectively, while also considering the geopolitical impacts of regional conflicts.
Published in SouthAsianDesk, April 19, 2026
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