ISLAMABAD: Pakistan has decided, in principle, to repay a $2 billion loan to the United Arab Emirates (UAE), with the payment scheduled for the end of this month.
According to Ministry of Finance sources, the amount, which has been held as a safe deposit in Pakistan’s account, has been accruing interest at a rate of six percent.
Previously, the UAE had been rolling over the loan on an annual basis, with partial rollovers in December 2025 for one and then two months.
The repayment follows a request from the UAE for the immediate return of funds, prompted by the current international economic situation.
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. The Pakistani government had requested the UAE to roll over the deposit for two years and subsequently submitted a fresh request for extension of the facility.
In January, the UAE had rolled over $2 billion for one month after the amount matured. A third tranche of $1bn is due to mature in July 2026.
