Pakistan has decided to repay a $2 billion financial deposit held with the State Bank of Pakistan (SBP) to the United Arab Emirates by the end of April, according to official sources.

The funds, placed as a safe deposit by Abu Dhabi to support Pakistan’s foreign exchange reserves, had previously been rolled over annually. However, recent extensions were granted only for short periods, signaling a shift in the arrangement.

Sources said Islamabad has been paying nearly 6% interest on the deposit. In December 2025, the UAE first approved a one-month extension, followed by another two-month rollover, rather than the longer renewals seen in previous years.

Officials indicated that the UAE recently sought the early return of the funds amid evolving geopolitical developments in the Middle East following the US-Israel conflict involving Iran.

Earlier this year, Pakistan had requested a longer rollover period of up to two years, but Abu Dhabi agreed only to short-term extensions. The latest assurance came after Deputy Prime Minister Ishaq Dar engaged with senior UAE leadership, securing a temporary rollover until April 17, 2026.

The deposit forms part of a broader $3 billion support arrangement provided through the Abu Dhabi Fund for Development, divided into three separate tranches of $1 billion each. Two tranches that matured earlier this year were rolled over briefly, while a third $1 billion tranche is scheduled to mature in July 2026 and will be reviewed closer to its deadline.

Pakistan is currently seeking rollovers of nearly $12 billion in external deposits during the ongoing fiscal year, including approximately $9 billion from Saudi Arabia and China, alongside the UAE funds, as the government works to stabilize foreign exchange reserves and manage external financing needs.