The State Bank of Pakistan (SBP) announced on Friday the full repayment of financial deposits totaling $3.45 billion to the United Arab Emirates. The final installment, a $1 billion payment made to the Abu Dhabi Fund for Development (ADFD), marks the completion of a major debt obligation during a critical period for the nation’s economy.
Final Debt Milestone
According to official statements, Pakistan cleared the remaining $1 billion today, following an earlier repayment of $2.45 billion executed at the beginning of April. This combined sum represents the entirety of the financial support packages previously provided by the UAE to bolster Islamabad’s foreign exchange reserves and stabilize the Pakistani Rupee.
Swift Response to Repayment Request
The move comes after reports surfaced earlier this month indicating that the UAE had made a formal and sudden request for the immediate return of $2 billion of the funds. Despite the sensitivity of the timing—as Pakistan grapples with mounting economic pressures and liquidity challenges—the Central Bank has managed to fulfill these international obligations in full.
Impact on Reserves and Relations
While the repayment puts temporary pressure on Pakistan's liquid assets, officials suggest that meeting these commitments is a vital step in maintaining international trust and long-term financial stability. These deposits were originally part of a broader economic assistance framework designed to help Pakistan navigate balance-of-payment crises.
The successful settlement of the $3.45 billion debt highlights the evolving financial dynamics between Islamabad and Abu Dhabi, as Pakistan continues its efforts to secure new financing avenues and stabilize its domestic economy.
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