ISLAMABAD: Pakistan remains in active communication with the United Arab Emirates regarding the rollover of a $2 billion deposit with the State Bank of Pakistan, Finance Minister Muhammad Aurangzeb stated on Wednesday, insisting there is no issue with the extension despite the absence of formal confirmation from the Gulf nation.
The minister’s remarks came after he addressed journalists following a meeting of the National Assembly Standing Committee on Finance. He emphasized that the external financing gap has been fully met and that ongoing discussions with UAE authorities ensure stability in the arrangement.
The $2 billion deposit, comprising tranches originally placed as safe deposits to bolster Pakistan’s foreign exchange reserves, has faced repeated short-term extensions this year. It first matured between January 16 and 23, 2026, prompting initial one-month rollovers. Subsequent maturities occurred in February, leading to further temporary extensions until mid-April 2026, with interest rates maintained at 6.5 percent.
Unlike previous years, when the UAE consistently rolled over the amount for a full year, the current pattern involves brief renewals. In January 2025, the UAE confirmed a one-year extension for two $1 billion deposits maturing that month, as announced by the State Bank of Pakistan. Similar annual rollovers occurred in January 2024 and earlier periods since the deposits were first placed around 2021-2023 as part of bilateral financial support.
In December 2025, State Bank Governor Jameel Ahmad formally requested a two-year rollover for $2.5 billion in related debt, along with a reduction in the interest rate from 6.5 percent to 3 percent. Sources indicated that during the January 2025 extension, the UAE had signaled this might be the final long-term rollover, contributing to the current cautious approach.
The UAE’s total exposure to Pakistan currently stands at $3.5 billion, including an additional $1 billion tranche scheduled to mature in July 2026. These deposits form a critical component of the $12.5 billion in commitments from friendly countries — including the UAE, Saudi Arabia, and China — to maintain cash deposits with the State Bank until at least September 2026, aligning with the expiration of Pakistan’s $7 billion IMF Extended Fund Facility approved in September 2024.
Under the IMF programme, which also includes a $1.4 billion Resilience and Sustainability Facility, external financing needs were discussed at the outset and are subject to review during ongoing talks. The current IMF mission, conducting technical discussions since late February 2026, has expressed concerns over the lack of a confirmed one-year rollover from the UAE, viewing it as essential for programme stability and external financing assurances.
Deputy Prime Minister and Foreign Minister Ishaq Dar separately assured that the UAE has committed to the rollover, with negotiations pointing toward a longer tenure than recent short extensions. He dismissed speculation of withdrawal and highlighted ongoing bilateral cooperation, including potential UAE acquisition of $1 billion worth of shares in the Fauji Foundation.
Pakistan has secured over $10.1 billion in foreign loans and rollovers during the first seven months of fiscal year 2026, though this figure remains lower than the previous year partly due to delays in confirming the UAE arrangement. Saudi Arabia has extended its $3 billion deposit, and China has rolled over $1 billion in similar facilities, underscoring varied responses from key allies.
The ambiguity surrounding the UAE deposit has drawn scrutiny amid Pakistan’s broader external debt management challenges. The country faces approximately $25.8 billion in external repayments in fiscal year 2025-26, with rollovers forming a routine pillar of strategy. Successful IMF reviews by March 11, 2026, could unlock $1.2 billion in tranches, providing further breathing space.
Analysts note that while short-term extensions offer temporary relief, a longer-term commitment from the UAE would significantly enhance confidence in Pakistan’s reserves, which have fluctuated but benefited from such friendly inflows since the early 2020s economic pressures.
The government continues to engage UAE authorities directly, with assurances that the arrangement aligns with mutual interests and supports Pakistan’s macroeconomic stability during the IMF-supported reform period.