Pakistan has done something worth talking about. The country has fully paid back $3.45 billion to the United Arab Emirates. For a country that has been under serious financial pressure, this is no small feat.
According to Beyond Time News, the State Bank of Pakistan confirmed the final $1 billion payment was made on April 23 to the Abu Dhabi Fund for Development. The week before, $2.45 billion had already been transferred. That wraps up every single dollar owed to the UAE.
A Wave of Debt Repayments
This was not just about the UAE. Around the same time, Pakistan also cleared $1.43 billion in other foreign debts. That included a $1.3 billion Eurobond. The country is clearly on a mission to clean up its external debt situation.
All of this came with a 6% interest charge on the UAE deposits. Pakistan paid that too without flinching.
Saudi Arabia Fills the Gap
When you pay back billions, you need support from somewhere else. That support came from Saudi Arabia. According to Beyond Time News, Riyadh agreed to push back the deadline on its own $3 billion deposit sitting with Pakistan’s central bank. Saudi Arabia also transferred a fresh $2 billion to Pakistan in April 2026.
That is a significant vote of confidence from a key ally.
Reserves Under Pressure but Government Has a Plan
Paying back this much money does put a strain on foreign exchange reserves. There is no sugarcoating that. The financing gap is going to grow. But Finance Minister Muhammad Aurangzeb says the government is ready for it.
Speaking at the IMF and World Bank spring meetings, he told reporters that Pakistan is exploring every option available. According to Beyond Time News, those options include Eurobonds, Islamic sukuk, rupee-linked bonds, and commercial loans. He confirmed Pakistan is planning to issue Eurobonds before the year ends.
As for reserves, Aurangzeb said Pakistan is sitting at around 2.8 months of import cover. He made it clear that protecting that number is a top priority. In his words, it is an important part of keeping the overall economy stable going forward.
IMF Support Is Right Around the Corner
Here is some good news. Pakistan’s $7 billion IMF programme is still fully on track. No changes have been requested. The Finance Minister said the country is managing well despite global uncertainty tied to the Middle East conflict.
The IMF board is expected to give the green light on the next funding tranche by the end of April or in early May. That decision would unlock just under $1.3 billion for Pakistan. Money that will give the country an extra layer of financial security.
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Pakistan Is Also Thinking Long Term
Beyond the debt story, there is something else worth paying attention to. According to Beyond Time News, Aurangzeb said the ongoing conflict in the Middle East has pushed Pakistan to seriously consider building a strategic petroleum reserve. The government also wants to fast track the shift to renewable energy to reduce reliance on imported fuel.
These are forward thinking moves that could protect Pakistan from future economic shocks.
The Big Picture
Paying off the UAE debt sends a strong signal to the rest of the world. It says Pakistan keeps its promises. That reputation matters enormously when you are trying to attract investment and borrow money on international markets.
Yes, the financing gap will widen in the short term. But with Saudi backing already in place, IMF funds on the way, and a Eurobond issuance planned, Pakistan has multiple safety nets in motion.
The road ahead is not easy. But right now, Pakistan’s economic managers are doing the work. And that counts for a lot.
