UAE seeks $2 billion loan repayment from Pakistan amid Iran tensions: Report

In response to the recent developments in the Middle East triggered by the US-Israel war on Iran, the UAE has requested the immediate repayment of the funds.

A media report on Friday stated that Pakistan has decided to repay a loan of US $2 billion to the United Arab Emirates (UAE) following a demand from the latter.

The UAE had consistently rolled over the arrangement until recently, providing these funds to support Pakistan’s balance of payments.

Sources indicated that, in light of the recent situation in the Middle East—particularly in the wake of the US-Israel conflict involving Iran—the UAE recently requested the immediate return of the funds.

Geo News reported, citing these sources, that the State Bank of Pakistan (SBP) held this amount as a safe deposit.

The report added that Pakistan is set to return the US $2 billion to Abu Dhabi by the end of this month.

Insiders revealed that Pakistan is paying an interest rate of approximately 6 percent on this amount. Previously, the UAE would roll over the deposit on an annual basis. However, in December 2025, the maturity of the deposit was extended first by one month and subsequently by another two months, until April 17.

For the current fiscal year, Pakistan required the rollover of approximately US$ 12 billion in external deposits; this figure includes US$ 5 billion from Saudi Arabia, US$ 4 billion from China, and US$ 3 billion held by the UAE.

Pakistan currently holds foreign exchange reserves exceeding US $21 billion and will proceed to repay the UAE; however, the country may require external financing support in the coming months.