Pakistan Economy
Pakistan completes repayment of $3.45 billion in deposits to the UAE
The State Bank of Pakistan announced on Friday that it has completed the repayment of $3.45 billion in deposits to the United Arab Emirates and returned a final tranche of $1 billion.
Pakistan had been forced to secure new $3 billion in funding from Saudi Arabia to support its foreign exchange reserves. The UAE had placed the deposits with Pakistan in 2018 to strengthen its foreign exchange reserves.
This comes weeks after the UAE requested Pakistan return the funds without publicly explaining the reason for this sudden request.
It is worth noting that the UAE loan, which has been renewed since 2018, includes a $3 billion facility with an annual interest rate of approximately 6%. However, it was changed from annual to monthly extensions earlier this year before Islamabad decided to repay it in full. An official stated that the repayment is expected by April 23.
This repayment comes as Pakistan aims to increase its foreign exchange reserves to over $18 billion by June under a $7 billion IMF program, which requires the renewal of bilateral deposits.
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