ISLAMABAD: Pakistan’s Foreign Office (FO) has dismissed recent claims regarding the return of financial deposits to the United Arab Emirates (UAE), calling them misleading and unfounded. The clarification came after reports suggested that Pakistan was asked to repay $3.5 billion earlier than expected. Officials have emphasized that the transaction is part of a routine financial process under previously agreed terms.
According to the FO spokesperson, the deposits were made under bilateral commercial agreements aimed at supporting Pakistan’s economic stability. These funds, originally provided in 2019, were part of external financing assistance to strengthen Pakistan’s balance of payments during a challenging economic period. Over time, the deposits were extended multiple times, reflecting ongoing cooperation between the two countries.
The government, through the State Bank of Pakistan, is now returning the matured deposits as per the agreed schedule. Authorities stressed that such repayments are standard practice in international financial arrangements and should not be misinterpreted as a sign of economic distress or weakening ties with the UAE.
Pakistan continues to maintain strong diplomatic and economic relations with the UAE, built on decades of trust and strategic partnership. Both countries collaborate across various sectors, including trade, investment, and defense. Officials reaffirmed their commitment to further strengthening this relationship for mutual growth and prosperity.
Under its ongoing International Monetary Fund (IMF) program, Pakistan relies on financial support and rollovers from key allies such as China, Saudi Arabia, and the UAE. These arrangements are essential for maintaining foreign exchange reserves and meeting external financing requirements.
Pakistan’s current foreign exchange reserves stand at approximately $16.3 billion. While the repayment may temporarily impact reserve levels, the government has assured that it is actively managing external flows to maintain economic stability. The Ministry of Finance has reiterated its focus on ensuring stable reserves and sustaining investor confidence.
