Pakistan has successfully repaid a $2 billion loan to the United Arab Emirates by the end of this month, according to reports from The Times of India. The loan was originally provided to support Pakistan's balance of payment and was kept with the State Bank of Pakistan (SBP) as a safe deposit. Sources told Geo News that the UAE recently requested the immediate return of funds following the recent situation in the Middle East following the US-Israel war on Iran.
Pakistan has been paying approximately 6 percent interest on the $2 billion amount, as reported by The Times of India. The UAE had previously used to roll over the deposit on a yearly basis, but in December 2025, the amount was first extended for one month and then for two months until April 17. The loan was provided to support Pakistan's balance of payment needs.
For the current fiscal year, Pakistan required a rollover of approximately $12 billion in external deposits, including $5 billion from Saudi Arabia, $4 billion from China, and $3 billion placed by the UAE, according to The Times of India. Pakistan currently holds more than $21 billion in reserves and will be able to repay the UAE, but it may need external financing in the coming months.
The loan repayment comes as Pakistan faces a severe fuel crisis following recent government announcements. The federal government has announced a sharp increase in petroleum prices, raising petrol by ₹137.23 per litre and diesel by ₹184.49 per litre, bringing new prices to ₹458.40 per litre for petrol and ₹520.35 per litre for diesel. Federal Minister for Electricity Awais Laghari has hinted that electricity prices could rise following the fuel surge, with consultations underway to consider earlier market closing hours and energy-saving measures.
As of April 3, 2026, the latest currency exchange rates show the US Dollar at ₹278.90-280.25, the UK Pound at ₹370.17-377.47, and the UAE Dirham at ₹75.97-77.27 per US Dollar. These rates reflect the ongoing currency market volatility amid the Middle East tensions and global economic pressures affecting Pakistan's external financial position.
