The United Arab Emirates hosts thousands of American troops at Al Dhafra air base near the capital Abu Dhabi, one of several American military sites in the Gulf. PHOTO: PEXELS
ISLAMABAD:
The Ministry of External Affairs on Saturday dismissed “misleading and baseless comments” on the refund of Pakistan’s financial deposits to the United Arab Emirates, clarifying that the move was a routine transaction carried out as per agreed terms.
The clarification comes after reports that Pakistan had decided to return $3.5 billion to the UAE by the end of the month, with a senior official indicating that Abu Dhabi had requested immediate repayment of the amount.
The deposits, originally extended in 2019 through the Abu Dhabi Development Fund, were part of external financial support aimed at stabilizing Pakistan’s balance of payments and had since been extended several times.
In a statement, Foreign Ministry spokesperson Tahir Andrabi said: “The deposits were placed within the framework of bilateral trade agreements, demonstrating the UAE’s strong support for Pakistan’s economic stability and prosperity.” He added that as per mutually agreed terms, the government, through the State Bank of Pakistan, was returning the overdue deposits.
“This is a routine financial transaction and any attempt to present it otherwise is erroneous and misleading,” he said.
The development is significant given Pakistan’s current external financing needs under its International Monetary Fund (IMF) program, which requires the country to secure around $12.5 billion in transfers from key partners, including China, Saudi Arabia and the United Arab Emirates, to maintain foreign exchange reserves.
According to the senior official, the decision to return the deposits ended persistent uncertainty over UAE funds, which in recent months had only been extended for short periods, sometimes as little as a month.
The latest data puts Pakistan’s central bank reserves at approximately $16.3 billion. A refund of $3 billion would reduce these reserves by around 18 percent, significantly weakening the country’s external buffer and import coverage.
Reaffirming bilateral ties, Andrabi said, “Pakistan and the UAE share a long-standing brotherly partnership based on trust and strategic cooperation in trade, investment, defense and people-to-people ties,” adding that the relationship has strengthened over time.
“The people of Pakistan warmly appreciate the pivotal role played by His Highness, the late Sheikh Zayed bin Sultan Al Nahyan, in forging this enduring friendship, as well as his special affection for Pakistan,” he said.
“Pakistan remains fully committed to further strengthening this long-standing relationship for a shared and prosperous future,” he added.
Meanwhile, the Finance Ministry said it was closely monitoring the situation. In a post on
“The government of Pakistan remains committed to meeting all its external obligations,” he added.
