Pakistan has finalised Pakistan’s debt repayment arrangements for liabilities owed to the United Arab Emirates and a maturing Eurobond, Finance Minister Muhammad Aurangzeb said on Tuesday. He stated that the government is prepared to meet its obligations on time amid pressure on external financing.
The minister told reporters in Islamabad that more than $3 billion is due to the UAE, while a $1.3 billion Eurobond is also maturing this week. He said the government has completed the required preparations and remains confident it will meet its financing targets for the current fiscal year.
Aurangzeb said Pakistan is shaping policy with regional tensions in mind. He also said the government will stabilise and maintain foreign exchange reserves in line with targets agreed with the International Monetary Fund.
He added that officials are also working on commercial financing and future bond issuance. According to the minister, talks are underway with a consortium of banks to secure additional funding.
The finance minister said Pakistan aims to restart efforts to issue Panda bonds by the end of April and raise up to $1 billion. However, he noted that the process is taking longer because this would be the country’s first Panda bond issuance. He also said the government will take key economic decisions and move forward with budget preparations in the coming days.
Pakistan had kept the UAE loan in its account as a safe deposit and paid 6 per cent interest on the amount. Under the earlier arrangement, the rollover mechanism allowed the funds to remain in the country’s reserves for a fixed period.
In recent months, however, the UAE tightened the rollover terms. Instead of offering the usual one-year extension, it rolled over the $2 billion deposit for shorter periods. At one stage, it first extended the facility by one month and then by another two months, pushing the repayment deadlines to mid and late April.
Officials say the repayment could place short-term pressure on foreign exchange reserves. Even so, they insist that broader financial planning is guiding the payment to preserve credibility and strengthen bilateral ties.
