ISLAMABAD – Facing severe pressure on foreign reserves, Pakistan is urgently seeking support from key allies China and Saudi Arabia to manage looming debt obligations and stabilize its currency.
The country is preparing to meet a $3.45 billion repayment to the United Arab Emirates (UAE). Of this, $450 million is due this week, $2 billion on April 17, and $1 billion by the last week of April. Officials are racing against the clock to fulfill these obligations.
As of early April, Pakistan’s liquid foreign reserves stood at $21.789 billion, with $16.381 billion held by the central bank and $5.407 billion with commercial banks. Authorities said the central bank’s reserves provide a cushion for immediate obligations, including a $1.3 billion Eurobond repayment. However, officials warn that the overall economic situation remains fragile.
The UAE previously offered short-term loans at 6.5% interest, despite requests by Pakistan for longer-term rollovers at lower rates. Discussions are ongoing to potentially convert part of the debt into long-term investment.
Economic challenges for the country include declining exports, falling foreign investment, and delayed issuance of Panda Bonds. Prime Minister Shehbaz Sharif noted that foreign support can boost reserves but may impact national pride. The government continues to focus on stabilizing finances while meeting IMF programme requirements.
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Authorities are closely monitoring all options to ensure timely debt repayments and maintain economic stability. Analysts warn that any delay could put further pressure on the rupee and financial markets. The situation underscores the importance of international support and effective economic management for Pakistan in the coming months.
