ISLAMABAD: Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, said on Tuesday that arrangements have been finalized to repay debt owed to the United Arab Emirates (UAE) as well as maturing Eurobonds.
Pakistan is required to repay more than $3 billion to the UAE following a demand by Emirati authorities, while a $1.3 billion Eurobond is also set to mature this week.
Speaking to the media in Islamabad, the finance minister expressed satisfaction over the arrangements, stating that Pakistan will fulfill all its commitments regarding timely debt repayments.
He added that the financing targets set for the current fiscal year would be achieved as planned.
Aurangzeb emphasized the need to formulate policies in view of the prevailing regional tensions, noting that foreign exchange reserves would be stabilized and maintained in line with targets agreed with the International Monetary Fund (IMF).
The minister further said that preparations are underway for commercial financing and the issuance of bonds, adding that discussions are ongoing with a consortium of banks to secure commercial funding.
He also revealed that the government plans to resume efforts by the end of April to issue Panda bonds, with a target of raising up to $1 billion. He noted that since this would be Pakistan’s first Panda bond issuance, the process is taking additional time.
Aurangzeb said the government is closely assessing the potential impact of regional geopolitical tensions on the national economy, adding that economic policies formulated in coordination with the IMF have helped steer the economy in the right direction.
He further stated that key economic decisions and budget preparations would be undertaken in the coming days.
The UAE loan has been held in Pakistan’s account as a safe deposit and Pakistan was paying an interest rate of 6 percent on the deposited amount. The arrangement, initially structured on a rollover basis, had allowed the funds to remain within Pakistan’s reserves for a defined period.
However, in recent months, the rollover terms became stricter. The UAE extended the $2 billion deposit for shorter durations instead of the usual one-year period. At one stage, the facility was rolled over for one month, followed by a two-month extension, pushing repayment deadlines to mid and late April.
While the repayment may exert short-term pressure on foreign exchange reserves, officials say it is being managed as part of broader financial planning to maintain credibility and strengthen bilateral relations.