Pakistan has decided to repay a $2 billion loan after the United Arab Emirates (UAE) demanded its immediate return, marking a major development in the financial relations between the two countries.
According to reports, Pakistan will transfer the $2 billion to the UAE by the end of the current month.
This $2 billion loan provided by the UAE was held in Pakistan’s account in the form of a safe deposit, on which Pakistan was regularly paying an interest rate of 6%.
Earlier, the UAE had rolled over this loan for Pakistan, and more recently, in December 2025, the loan term was extended for a short period.
Reports say that a demand for the immediate return of this amount has now come from Abu Dhabi, after which Pakistan has decided to repay the loan.
Saudi Arabia and China, along with the UAE have pledged to maintain $12.5 billion in combined cash deposits with the State Bank of Pakistan (SBP) until September 2027 to support the $7 billion IMF program.
