Pakistan has decided, in principle, to repay a $2 billion loan to the United Arab Emirates (UAE), with the repayment scheduled for the end of this month.
According to sources in the Ministry of Finance, the funds, which had been held as a safe deposit in Pakistan’s account, have been earning interest at a rate of six percent.
Previously, the UAE had been renewing the loan annually, with partial rollovers in December 2025 for one month and then for two months. The current repayment comes after the UAE requested the immediate return of the funds, citing the prevailing international economic conditions.
Earlier, the UAE had rolled over $2 billion for just one month, with $1 billion maturing on February 16 and the remaining $1 billion on February 22. Pakistan had requested a two-year extension for the deposit and later submitted a fresh request for an extension of the facility.
In January, the UAE rolled over $2 billion for one month after its maturity. A third tranche of $1 billion is scheduled to mature in July 2026.
