Says Pakistan’s clear ability to meet commitments strengthens mutual trust rather than any strain
Pakistan-UAE flag. Photo: File
The repayment of matured long-term foreign deposits to the United Arab Emirates (UAE) reflects Pakistan’s improved external liquidity position, economic stability and increased political credibility, besides the ability to honor its international obligations without compromising macroeconomic fundamentals, according to financial analysts.
At the end of March 2026, Pakistan’s total liquid foreign exchange reserves stood at approximately $21.79 billion, providing a solid buffer to manage external liabilities. The repayment underscored the positive trajectory of the country’s external finances, built through sustained reforms and improved inflows.
According to official statistics, Pakistan’s foreign exchange reserves had plunged to multi-year lows in 2022 amid balance of payments pressures and political instability, with State Bank of Pakistan (SBP) holdings falling below $7 billion at one point.
“Since then, the Government of Pakistan and the SBP have implemented robust external account stabilization measures and macroeconomic reforms, including close engagement with the International Monetary Fund (IMF) and bilateral partners. These efforts have successfully rebuilt external buffers,” according to a financial analyst.
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By the end of June 2025, the SBP’s foreign exchange reserves had increased to about $14.51 billion, up from approximately $9.39 billion in June 2024. The recovery momentum has continued into 2026, with reserves rising to levels not seen since before the 2022 crisis. The trend signaled restored investor confidence and greater stability in the external sector.
The analyst said the fraternal ties with the UAE remained non-negotiable and Pakistan’s clear ability to meet those commitments strengthened mutual trust rather than any strain.
Earlier on April 4, a spokesman for the Ministry of Foreign Affairs had in a statement rejected the recent misleading and unsubstantiated comment regarding financial deposits from the UAE that were with the State Bank.
“The deposits were placed under bilateral commercial agreements, demonstrating the UAE’s strong support for Pakistan’s economic stability and prosperity. Accordingly, as per mutually agreed terms, the Government of Pakistan through the SBP is now returning the matured deposits to the UAE. This is a routine financial transaction and any attempt to portray it otherwise is added false and misleading.”
He said Pakistan and the UAE shared a long-standing, brotherly partnership built on trust and strategic cooperation across trade, investment, defense and people-to-people ties.
