Islamabad (Diplomat.so) - The United Arab Emirates has agreed to roll over a $2 billion deposit placed with the State Bank of Pakistan, giving Islamabad critical short-term support just weeks before a key review of its $7 billion Extended Fund Facility with the International Monetary Fund (IMF), senior officials said.
The two-month rollover will remain in place until April 17, 2026, at an interest rate of 6.5 percent, according to officials with direct knowledge of the arrangement. Formal documentation from Emirati authorities is expected shortly, though Pakistani officials say the assurance has been conveyed at the highest levels.
The extension follows direct engagement by Pakistani Deputy Prime Minister and Foreign Minister Ishaq Dar, who contacted senior UAE leadership earlier this week. Officials familiar with the discussions said Dar briefed Emirati counterparts on Pakistan’s reform implementation under the IMF program and its external financing roadmap, arguing that continuity of bilateral deposits was essential to maintaining reserve adequacy during the review cycle.
Pakistani Foreign Ministry spokesperson Tahir Andrabi, addressing reporters in Islamabad, confirmed Dar’s outreach and described it as "very positive” in securing the rollover. "The extension is assured. The duration remains the prerogative of the depositor, but the matter is under control,” Andrabi said.
The $2 billion forms part of a broader $3 billion deposit provided by the Abu Dhabi Fund for Development in three tranches. Two $1 billion tranches that matured earlier this year were rolled over for one month. The remaining $1 billion tranche is due in July 2026 and is expected to be addressed closer to maturity.
Islamabad is seeking the release of a $1 billion fourth tranche following the IMF’s third review.
For the current fiscal year, Pakistan is seeking the rollover of approximately $12 billion in external deposits. Of that amount, about $9 billion is expected from Saudi Arabia and China combined — roughly $5 billion from Riyadh and $4 billion from Beijing. These funds are primarily placed with Pakistan’s central bank as bilateral deposits and are critical in meeting gross financing requirements agreed with the IMF. In December, Saudi Arabia extended the maturity of its $3 billion deposit by one year.
While the UAE’s short-term extension eases immediate reserve pressure, officials acknowledge that securing longer-duration rollovers from key bilateral partners will remain essential to maintaining external stability beyond the IMF review.
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