Foreign Office Clarifies Routine Transaction
The Foreign Office (Pakistan) on Saturday rejected claims suggesting any irregularity regarding financial deposits from the United Arab Emirates (UAE). The FO called the reports “misleading and unfounded,” emphasizing that the repayment of $3.5 billion was a routine and planned transaction.
A senior Pakistani official had confirmed on Friday that the country would return the debt to the UAE before the month’s end. These funds were part of external financing support provided by the UAE in 2019 to stabilize Pakistan’s balance of payments. The repayment follows mutually agreed terms under bilateral commercial agreements.
FO Spokesperson Tahir Andrabi said the deposits “demonstrate the UAE’s strong support for Pakistan’s economic stability and prosperity.” He stressed that portraying the repayment otherwise was “erroneous and misleading.”
He added that Pakistan and the UAE enjoy a longstanding partnership based on trust and strategic cooperation. “This relationship spans trade, investment, defence, and people-to-people ties, and it has grown stronger over the years,” he said. The FO also highlighted the pivotal role of the late Sheikh Zayed bin Sultan Al Nahyan in nurturing close ties with Pakistan.
Repayment Reflects IMF Commitments
The senior official noted that the UAE deposits had been rolled over multiple times since 2019. Recent extensions had become as short as one month, reflecting Emirati caution. Returning the matured deposits now ends the uncertainty surrounding these funds.
Under Pakistan’s ongoing International Monetary Fund (IMF) programme, the country must secure around $12.5 billion in rollovers from China, Saudi Arabia, and the UAE. These deposits are critical to maintaining foreign exchange reserves and meeting external financing needs.
Current data shows Pakistan’s central bank reserves at roughly $16.3 billion. A $3.5 billion repayment would reduce reserves by about 18%, significantly lowering the external buffer and import cover. The Ministry of Finance reassured the public via X that it is “continuously monitoring and managing Pakistan’s external flows to ensure stable foreign exchange reserves.”
The government affirmed its commitment to fulfilling all external obligations while maintaining economic stability. FO officials reiterated that the UAE repayment should be viewed as a routine part of Pakistan’s financial planning rather than an emergency or extraordinary measure.
Strengthening Bilateral Ties
The FO highlighted Pakistan’s dedication to further strengthening ties with the UAE. The two countries share a deep, fraternal relationship built on decades of cooperation in trade, investment, and diplomatic engagement. Both governments emphasize mutual respect and collaboration for a shared and prosperous future.
The clarification comes amid growing speculation in local media regarding Pakistan’s financial position. By officially addressing the matter, the FO sought to prevent misinformation and reinforce confidence in Pakistan’s economic management.
