Pakistan Settles $3.45B Loan to UAE, Strengthening Economic Stability

In a noteworthy development, Pakistan has completed the repayment of a total of USD 3.45 billion to the United Arab Emirates (UAE), officially settling its debts to the Abu Dhabi Fund for Development (ADFD), as announced by the State Bank of Pakistan (SBP) on Friday.

The central bank revealed that the final portion, amounting to USD 1 billion, was paid on April 23, 2026, while the remaining USD 2.45 billion had been cleared earlier last week. With these payments, Pakistan has extinguished its outstanding obligations to the UAE.

These funds were initially extended by the UAE to assist with balance-of-payments needs and had undergone several rollovers since their inception in 2018. Earlier this year, Pakistan shifted the repayment from annual payments to monthly installments before opting to pay the total due amount.

To facilitate these repayments, Pakistan relied on recent financial inflows, including a notable USD 2 billion deposit from Saudi Arabia, forming part of a larger USD 3 billion support initiative.

This repayment is a significant relief for Pakistan's external debt landscape and enhances its ongoing economic strategy under the supervision of the International Monetary Fund (IMF). The nation’s forex reserves, previously estimated at USD 16 billion, provided the necessary buffer for this financial obligation.

While earlier reports indicated that Pakistan aimed to settle approximately USD 3.5 billion by the end of April, following a request from the UAE for an accelerated repayment, the State Bank confirmed the total repayment of USD 3.45 billion. It appears a previously outstanding amount of USD 450 million was not incorporated into the latest settlement.

This achievement is a pivotal moment in Pakistan's ongoing journey to stabilize its economy and navigate external fiscal challenges amidst regional difficulties.