Pakistan is in talks with Saudi Arabia and China to repay a loan of about $3 billion to the United Arab Emirates (UAE), reported Bloomberg, citing people familiar with the matter.
The development comes after Pakistan “failed to reach an agreement with the UAE to roll over the debt for the first time in seven years”, prompting Islamabad to arrange alternative funding.
As per the report, the amount of support under discussion is over $3.5 billion.
What options does Pakistan have to pay off $3.5bn UAE loan?
The UAE had sought a shorter rollover period of less than a year, which Pakistan did not accept. However, Pakistan’s Ministry of Foreign Affairs has described the repayment as a “routine financial transaction,” said Bloomberg.
The loan had been rolled over since 2018, including a $3 billion facility at around 6% annual interest, but was shifted from annual to monthly extensions earlier this year before Islamabad decided to repay it in full, with clearance expected by April 23, a government official told Reuters.
The repayment to the UAE comes as Pakistan targets foreign exchange reserves above $18 billion by June under a $7 billion International Monetary Fund (IMF) programme, which requires bilateral deposits to be rolled over.
On Sunday, Anadolu Agency, citing sources from Pakistan, reported that Saudi Arabia and Qatar will provide Pakistan $5 billion in financial assistance, enabling Islamabad to avert stress on the country’s foreign reserves while making external payments by June.
Foreign exchange reserves held by the State Bank of Pakistan (SBP) stood at $16.40 billion during the week ended April 3, 2026.
Meanwhile, Bloomberg noted that Pakistan and Saudi Arabia have steadily increased their economic and security ties in recent months, at the same time that relations between Saudi Arabia and the UAE have frayed.
Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan met with Pakistan Prime Minister Shehbaz Sharif on Friday night in Islamabad.
Similarly, Pakistan enjoys close economic ties with China. Islamabad is making attempts to start the next phase of the China-Pakistan Economic Corridor, read the report.
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