UAE Approves Short-Term Rollover of $2 Billion Pakistan Loan, providing temporary relief to Pakistan’s strained finances. The United Arab Emirates extended the rollover for one month, helping Pakistan manage external debt and maintain forex stability. This move is part of ongoing UAE financial assistance to Pakistan under bilateral agreements and IMF conditions.
Pakistan initially requested the rollover of a total of $3 billion loan for a longer period. The first tranche of $2 billion had matured last month, while another $1 billion tranche is due in July 2026. Officials noted that this short-term rollover gives Pakistan breathing space but does not fully resolve long-term external debt management challenges.
Under the Pakistan IMF programme, securing the rollover of foreign loans is a key requirement. The IMF mandates that Pakistan manage $12 billion in external loans during the current financial year. The UAE, along with Saudi Arabia and China, has deposited $12.5 billion in cash with the State Bank of Pakistan (SBP), ensuring liquidity and confidence in the banking system.
The short-term nature of the rollover contrasts with previous one-year extensions. Pakistan hopes that the tranches will eventually be rolled over for a longer tenure. Analysts say that this step strengthens bilateral financial relations between the UAE and Pakistan while signaling commitment to Pakistan’s economic relief measures.
In conclusion, the UAE approves the short-term rollover of a $2 billion Pakistan loan, offering crucial relief amid economic pressures. While temporary, this support helps Pakistan meet IMF conditions, stabilize reserves, and plan future debt repayments effectively.
