The United Arab Emirates (UAE) has extended the rollover of a $2 billion loan to Pakistan for one more month, sources confirmed. This marks a short-term extension compared to previous one-year rollovers.
Pakistan has requested the UAE to roll over a total of $3 billion for a longer period. The $2 billion tranche matured last month, while another $1 billion is due in July. Officials hope the UAE will eventually approve a one-year extension.
Under the IMF programme, Pakistan must secure the rollover of $12 billion in external loans during the current fiscal year. The $3 billion from the UAE forms a critical part of this requirement. Sources noted that UAE deposits worth $3 billion are currently held in Pakistan’s central bank.
Officials emphasized that Pakistan has formally requested the UAE to extend all three tranches of the $3 billion. Discussions are ongoing, with optimism that a one-year rollover could be finalized soon.
The short-term extension is unusual. Historically, the UAE has provided one-year rollovers for Pakistan’s loans. Analysts suggest the one-month extension may reflect cautious assessment by UAE authorities amid ongoing economic challenges in Pakistan.
Under the broader $7 billion IMF programme, the UAE, Saudi Arabia, and China have collectively committed to maintaining $12.5 billion in cash deposits with Pakistan’s central bank. These deposits are critical for Pakistan to meet its IMF conditions and stabilize foreign reserves.
The situation regarding the tenor and maturity of UAE’s loan is expected to become clearer in the coming days. Pakistani authorities continue to negotiate with UAE officials to secure a longer-term rollover.
Economists say the UAE’s support is vital for Pakistan’s economic stability. A successful one-year rollover would help Pakistan manage debt repayments, support reserves, and ensure compliance with IMF requirements.
Pakistan and the UAE have maintained strong financial cooperation over the years. This latest extension, though short-term, reflects ongoing trust and the strategic partnership between the two countries.
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The UAE’s decision will have a direct impact on Pakistan’s ability to meet IMF targets and maintain macroeconomic stability in the coming months.
