Pakistan to repay $2 billion loan to UAE amid Middle East tensions

Pakistan will repay a $2 billion loan to the United Arab Emirates (UAE) by the end of this month, a media report said on Friday.“The UAE recently asked for the immediate return of the funds in the wake of the recent situation in the Middle East following the US-Israel war on Iran,” sources told Geo News, as quoted by PTI. The loan had been provided to support Pakistan’s balance of payment, and the amount was kept with the State Bank of Pakistan (SBP) as a safe deposit. Insiders said Pakistan has been paying around 6 per cent interest on the amount.In the past, the UAE used to roll over the deposit on a yearly basis. However, in December 2025, the amount was first extended for one month and then for two months until April 17.For the current fiscal year, Pakistan required a rollover of approximately $12 billion in external deposits, including $5 billion from Saudi Arabia, $4 billion from China, and $3 billion placed by the UAE.Pakistan currently holds more than $21 billion in reserves and will be able to repay the UAE, but it may need external financing in the coming months.