UAE asks Pakistan to repay $3.5 billion loan in April amid West Asia tensions

Pakistan has scheduled the repayment of a $3.5 billion loan to the United Arab Emirates (UAE) within April, after the Gulf nation sought immediate return of the funds amid rising tensions in West Asia. The decision has been confirmed by senior officials, with repayments planned in multiple tranches during the month.

According to the schedule, $450 million will be repaid on April 11, followed by $2 billion on April 17 and another $1 billion on April 23. Officials indicated that the funds may be drawn from Pakistan’s foreign exchange reserves, which currently stand at around $16.4 billion.

The move comes against the backdrop of shifting financial dynamics, with the UAE previously opting for short-term rollovers instead of long-term extensions on loans. The ongoing regional conflict has accelerated the repayment demand, even as discussions continue on potentially converting part of the outstanding amount into investment.

Despite the large outflows, Pakistan maintains that its reserves remain at manageable levels, supported largely by deposits from allied countries under an IMF programme. However, economic pressures persist, with declining exports and weak foreign investment posing challenges to the country’s financial stability.