He says any attempt to present the transaction otherwise is erroneous and misleading.
Ministry of Foreign Affairs spokesperson Tahir Andrabi speaking at a press conference today, Thursday, March 26. PHOTO: SCREEN CAPTURE
The Ministry of Foreign Affairs on Saturday rejected what it called a “misleading and baseless” comment on the United Arab Emirates (UAE) financial deposits in the State Bank of Pakistan (SBP), describing the matter as a “routine financial transaction.”
The statement followed a senior cabinet minister’s announcement on Friday that the government had decided to repay the $3.5 billion debt owed to the United Arab Emirates within a month, ending speculation about the status of the debt. Abu Dhabi had previously extended the extension of this amount for only one month.
🔊PR No.9️⃣1️⃣/2️⃣0️⃣2️⃣6️⃣
Pakistan rejects misleading comments on UAE financial deposits, reaffirms strong partnership with UAE pic.twitter.com/0RCfCEbmea
— Ministry of Foreign Affairs – Pakistan (@ForeignOfficePk) April 4, 2026
According to the statement issued by FO today, X said the deposits were made under bilateral trade agreements that reflect the UAE’s strong support for Pakistan’s economic stability and prosperity.
“In accordance with mutually agreed terms, the Government of Pakistan, through the SBP, is now in the process of returning overdue deposits to the UAE. This is a routine financial transaction, and any attempt to present it otherwise is erroneous and misleading,” the FO emphasized.
Read: Pakistan to pay off $3.5 billion UAE debt this month
The statement further highlighted the long-standing brotherly partnership between Pakistan and the UAE, based on trust and strategic cooperation in areas such as trade, investment, defense and people-to-people ties. He noted that this relationship has “withstood the test of time and has grown stronger with each passing year.”
The people of Pakistan, the statement added, “warmly appreciate the pivotal role played by the late Sheikh Zayed bin Sultan Al Nahyan in forging this enduring friendship, as well as his special affection for Pakistan.”
Concluding the statement, the FO affirmed Pakistan’s full commitment to further strengthen this enduring partnership for a shared and prosperous future.
The express PAkGazette had reported in January that the United Arab Emirates renewed two loans of $1 billion each, which matured on January 16 and 22, for just one month. Pakistan had sought a two-year extension and an interest rate of around 3%. But the UAE renewed it on the old conditions of 6.5% interest rate.
Under the IMF’s $7 billion program, the UAE, Saudi Arabia and China had committed to keeping their combined $12.5 billion in cash deposits in the SBP at least until the program expires in September next year.
Read also: No demand for repayment of UAE’s $2 billion loan, SBP governor tells NA panel
In December, State Bank of Pakistan Governor Jameel Ahmad had asked the UAE government to roll over $2.5 billion of debt for two years and cut the interest rate by almost half.
Later, Prime Minister Shehbaz Sharif also asked the UAE President to extend the repayment deadline. The prime minister said the UAE had agreed to refinance the debt, but did not provide further details.
The UAE provided $2 billion to Pakistan in 2018 for one year, but Pakistan was unable to repay the amount and has since requested annual refinancing. The UAE subsequently provided another $1 billion loan in 2023 to help Pakistan meet external financing requirements for an IMF bailout.
Early last month, SBP Governor Jameel Ahmad said that the UAE was not demanding repayment of the $2 billion loan but had instead transferred it to a monthly renewal. But it has now emerged that the UAE has asked Pakistan to return its money, which had originally been granted for only one year.
In December, Governor Ahmad had asked the UAE government to roll over $2.5 billion in debt over two years and cut the interest rate by almost half. Later, Prime Minister Shehbaz Sharif also asked the UAE President to extend the repayment deadline. The prime minister said the UAE had agreed to refinance the debt, but did not provide further details.
Read: UAE renews $2 billion Pak loan for one month
Pakistani authorities said the government would return $450 million on April 11, $2 billion on April 17 and another $1 billion on April 23. They said they were making arrangements to pay the debt.
However, there was a possibility that the money could be paid from the $16.4 billion foreign exchange reserves held by the central bank.
In total, Pakistan will repay $4.8 billion of debt in April, including $1.3 billion in Eurobonds on April 8.
