Pakistan has fully repaid a $3.45 billion deposit to the United Arab Emirates, the State Bank of Pakistan (SBP) announced on Friday.
In a posting on X, the central bank said it had repaid $1 billion to the Abu Dhabi Fund for Development on April 23 (Thursday). “Deposits of $2.45 billion were repaid last week,” it said.
“This completes the repayment of total deposits of $3.45 billion to U.A.E.,” it added.
Earlier this month, a federal minister said Pakistan had decided to repay a loan of $3.45 billion to the U.A.E. before the end of this month and would not seek any additional rollovers. Petroleum Minister Ali Pervaiz Malik told Geo News the state was willing to bear the economic cost of the decision to uphold “national dignity.” Pakistan was paying 6% in interest on the loan.
The U.A.E. had deposited the funds in question to the SBP in 2019 to help stabilize Pakistan’s balance of payments. In March, Islamabad had sought further rollover of the funds, but had failed to achieve it, triggering concerns about the country’s financing gaps and the impact on the foreign exchange reserves. The losses were compounded by Pakistan repaying $1.43 billion in external debt, including a $1.3 billion Eurobond.
However, to offset the repayments, Pakistan received an additional $3 billion deposit from Saudi Arabia, with the first tranche of $2 billion received on April 15 and the second of $1 billion received on April 21. Additionally, the country has issued a fresh Eurobond of $750 million.
On Thursday, the SBP announced the country’s total foreign reserves had risen to $20.63 billion, as of April 17.