ISLAMABAD: The Pakistan government plans to seek a rollover of a $3 billion loan from the United Arab Emirates as part of efforts to manage external financing needs, official sources said. Prime Minister Shehbaz Sharif is expected to write to UAE President Sheikh Mohamed bin Zayed Al Nahyan to formally request the extension of three separate loan tranches before their respective maturity dates.
Sources in the Ministry of Finance stated that the groundwork for the request has been completed, and the prime minister will approach the UAE authorities in the coming days. The deposits, placed by the UAE in the State Bank of Pakistan, play a key role in supporting the country’s balance of payments and foreign exchange reserves.
According to officials, the first $1 billion tranche will mature on January 17, followed by another $1 billion on January 23. The remaining $1 billion tranche is scheduled to mature in July this year. Consequently, the government plans to request a rollover of all three installments, amounting to the full $3 billion facility.
Interest costs and reserve support under review
Officials said Pakistan currently pays interest ranging between 3 and 6.5 percent on the total $3 billion deposited by the UAE in the central bank. However, they cautioned that the interest rate could rise above 6.5 percent depending on revised terms agreed during the rollover process.
The UAE deposits form a critical part of Pakistan’s external financing framework, especially as the country continues to face pressure from debt repayments and import financing needs. By securing a rollover, the government aims to maintain reserve stability and avoid immediate outflows that could strain the rupee and foreign exchange position.
Moreover, officials stressed that continued financial support from friendly countries remains vital as Pakistan pursues economic stabilization measures. The rollover request also aligns with broader efforts to manage short-term liabilities while engaging with international partners on longer-term reforms.
The Ministry of Finance believes a successful rollover would provide temporary fiscal breathing space and strengthen confidence in Pakistan’s ability to meet its external obligations without disruption.
