Pakistan clears $3.45bn UAE debt after final payment

Pakistan has completed the repayment of $3.45 billion in deposits owed to the UAE. The State Bank of Pakistan said they made the payment of $1 billion following $2.45 billion that was repaid earlier.

According to official statement, the SBP said the last tranche of $1 billion was repaid to the Abu Dhabi Fund for Development on April 23. This follows an earlier repayment of $2.45 billion made last week, bringing the total settlement to $3.45 billion and fully clearing Pakistan’s outstanding deposits to UAE-based institutions.

It has been reported that the debt was repaid without significantly impacting foreign exchange reserves, currently around $15 billion, by securing fresh financing from Saudi Arabia.

Some government sources claimed that Pakistan got some help from Saudi Arabia to pay back about $2 billion of the debt, while the remaining $1 billion was also settled through additional borrowing. 

Pakistan had told the IMF that they would be able to pay back their debts. Some countries, including Saudi Arabia, the United Arab Emirates and China said they would help Pakistan by keeping their money in the State Bank of Pakistan. This is part of the plan to help Pakistan get its economy back on track.

Economists say the UAE debt repayment highlights both Pakistan’s reliance on allied financing and its efforts to maintain credibility with international lenders in efforts to make its economy more stable in the long-run.