KARACHI (MNN); The State Bank of Pakistan (SBP) confirmed on Saturday that the government has repaid $2 billion to the United Arab Emirates (UAE) as part of earlier financial assistance.
Earlier this month, a senior official revealed that Abu Dhabi had requested the early return of $3.5 billion, originally provided in 2019 to support Pakistan’s balance of payments. Of this amount, $500 million had already been repaid, while the remaining balance is expected to be cleared by April 23. The total outflow of $3.5 billion is likely to put pressure on the country’s foreign exchange reserves.
However, Saudi Arabia has stepped in with financial support, pledging an additional $3 billion in deposits and extending its existing $5 billion facility for another three years. Shortly after, the SBP confirmed receipt of $2 billion from Saudi Arabia.
As of April 10, Pakistan’s foreign exchange reserves stood at $20.52 billion. Finance Minister Muhammad Aurangzeb stated that the government is exploring multiple financing options, including Eurobonds, Islamic sukuk, and commercial borrowing, to offset repayments and maintain reserve stability.
Speaking on the sidelines of the IMF and World Bank spring meetings, Aurangzeb said Pakistan remains capable of meeting its debt obligations, with reserves covering approximately 2.8 months of imports. He emphasized that maintaining this level is critical for macroeconomic stability.
He further noted that while no changes have yet been sought in Pakistan’s $7 billion IMF programme despite regional economic pressures, it remains an available option if needed.
Meanwhile, the government recently raised $500 million through a Eurobond issuance, its first in four years. Additionally, Pakistan repaid $1.43 billion in external debt last week, including a $1.3 billion Eurobond that matured on April 8.
