Muhammad Aurangzeb insists there is ‘absolutely no issue’ as Gulf deposit matures amid external financing pressures
Pakistan is in direct discussions with the United Arab Emirates over the rollover of a $2bn deposit, Finance Minister Muhammad Aurangzeb said on Wednesday, seeking to reassure markets after the loan matured earlier this year.
The UAE has maintained deposits worth $2bn with Pakistan’s central bank since 2023, providing critical support to the country’s foreign exchange reserves as it navigates external financing constraints.
The loan first matured in January and again in February, but no formal announcement regarding its extension has been made by the State Bank of Pakistan.
“We are directly in communication with them,” Aurangzeb told reporters when asked about the status of the rollover. “There is absolutely no issue with the rollover. I want to be very categorical.”
Reliance on friendly nations
Rollovers from key partners including China, Saudi Arabia and the UAE have become a recurring feature of Pakistan’s external financing strategy, helping the country avoid balance-of-payments crises while it implements reforms under an International Monetary Fund programme.
The UAE is Pakistan’s third-largest trading partner after China and the United States and has invested more than $10bn in the country over the past two decades, according to Emirati officials.
More than one million Pakistanis live and work in the UAE, making it one of the largest sources of remittances — a vital inflow for Pakistan’s economy.
Analysts say timely confirmation of deposit extensions from friendly countries remains crucial for maintaining investor confidence and stabilising foreign exchange reserves as Islamabad works to strengthen its fiscal and external position.
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