Pakistan Repays UAE Deposit, Signals Strengthening External Position
Pakistan has repaid a long-term foreign deposit to the United Arab Emirates, signaling improved financial stability and a stronger capacity to meet external obligations.
According to recent data, Pakistan’s total foreign exchange reserves reached approximately $21.79 billion by the end of March 2026, reflecting growing confidence in the country’s ability to manage its external liabilities.
The development marks a significant turnaround from 2022, when Pakistan faced a severe balance of payments crisis amid political uncertainty, causing reserves held by the State Bank of Pakistan to fall below $7 billion at one point.
Since then, the government, in coordination with the International Monetary Fund (IMF) and bilateral partners, has implemented economic reforms and focused on stabilizing external accounts, yielding positive results.
By the end of June 2025, reserves held by the State Bank of Pakistan had increased to around $14.51 billion, up significantly from approximately $9.39 billion in June 2024. This improvement was driven by inflows from external sources and effective policy measures.
The upward trend has continued into 2026, with reserves nearing their highest levels since 2022, indicating improved investor confidence and external sector stability.
Experts say the repayment of the UAE deposit reflects Pakistan’s enhanced liquidity position and policy credibility. With stable reserves and sufficient repayment capacity, the move should not be viewed as a financial strain.
Pakistan also reaffirmed its commitment to maintaining strong ties with the United Arab Emirates, emphasizing that bilateral relations will remain robust under all circumstances.
