He says Pakistan’s clear ability to deliver on its commitments reinforces mutual trust rather than any tension.
Flags of Pakistan and United Arab Emirates. Photo: Archive
The repayment of overdue long-term foreign deposits to the United Arab Emirates (UAE) reflects Pakistan’s improved external liquidity position, economic stability and enhanced political credibility, as well as its ability to meet its international obligations without compromising macroeconomic fundamentals, according to financial analysts.
As of end-March 2026, Pakistan’s total liquid foreign exchange reserves stood at approximately $21.79 billion, providing a strong cushion to manage external commitments. The repayment underlined the positive trajectory of the country’s external finances, built through sustained reforms and improved capital inflows.
According to official statistics, Pakistan’s foreign exchange reserves had plummeted to multi-year lows in 2022 amid balance of payments pressures and political instability, with the State Bank of Pakistan’s (SBP) holdings falling below $7 billion at one point.
“Since then, the Government of Pakistan and the SBP have implemented robust external account stabilization measures and macroeconomic reforms, including close engagement with the International Monetary Fund (IMF) and bilateral partners. These efforts have been successful in rebuilding external reserves,” according to a financial analyst.
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By the end of June 2025, the SBP’s foreign exchange reserves had increased to about $14.51 billion, up from about $9.39 billion in June 2024. The recovery momentum has continued into 2026, with reserves recovering to levels not seen since before the 2022 crisis. The trend indicated a recovery in investor confidence and greater external sector stability.
The analyst said brotherly ties with the UAE remain non-negotiable and Pakistan’s clear ability to deliver on these commitments reinforced mutual trust rather than any tension.
Earlier, on April 4, a spokesperson for the Ministry of Foreign Affairs, in a statement, had rejected the recent misleading and baseless comment regarding the UAE’s financial deposits in the State Bank.
“The deposits were placed under bilateral trade agreements, demonstrating the UAE’s strong support for the economic stability and prosperity of Pakistan. Accordingly, in accordance with mutually agreed terms, the Government of Pakistan, through the SBP, is returning the overdue deposits to the UAE. This is a routine financial transaction, and any attempt to present it otherwise is erroneous and misleading,” the spokesperson added.
He said Pakistan and the UAE shared a long-standing brotherly partnership based on trust and strategic cooperation in trade, investment, defense and people-to-people ties.
