ISLAMABAD: The Pakistan government plans to request a rollover of a $3 billion loan from the United Arab Emirates (UAE) ahead of its upcoming maturities, official sources confirmed on Monday. Prime Minister Shehbaz Sharif is expected to write to UAE President Sheikh Mohamed bin Zayed Al Nahyan, seeking extension of the three tranches of the loan before they come due.
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The total $3 billion, deposited by the UAE in the State Bank of Pakistan, has been utilized to support the country’s balance of payments. According to finance ministry officials, the government aims to secure rollover for all three installments to maintain financial stability and avoid repayment pressure.
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The first $1 billion tranche is set to mature on January 17, followed by another $1 billion on January 23, with the final $1 billion due in July 2026. Officials noted that the loan currently carries interest rates ranging between 3 and 6.5 per cent, but delays in rollover could result in interest rates increasing above 6.5 per cent.
Sources said the finance ministry has completed preparations for the formal request, which is expected to be submitted shortly. The UAE loan has been a critical component of Pakistan’s foreign reserves, helping the country manage import payments and maintain liquidity in the banking sector.
Securing a rollover is part of Pakistan’s broader strategy to ensure macroeconomic stability amid global financial uncertainties. The government has emphasized its commitment to maintaining transparent and cooperative relations with its Gulf partners to sustain long-term financial support.
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Officials indicated that discussions with UAE authorities would focus not only on rollover terms but also on potential adjustments to interest rates and repayment schedules, ensuring both parties benefit from the arrangement.
The move comes as Pakistan continues efforts to stabilize its external finances while managing domestic economic challenges, including inflation, trade deficits, and fiscal pressures.