Islamabad [Pakistan], April 4 : Pakistan has decided to return USD 3.5 billion in debt to the United Arab Emirates (UAE) before the end of the month, a senior Pakistani official said, as reported by the Dawn.
The official described the move as a step taken to uphold "national dignity", despite the expected impact on the country's foreign exchange reserves. "The amount will be returned as soon as possible," the official said, adding that "national dignity could not be compromised for financial considerations."
The news report said that Abu Dhabi had sought the immediate return of the funds, which were part of external financial support extended in 2019 through the Abu Dhabi Fund for Development to stabilise Pakistan's balance of payments.
As reported by Daw, Pakistan is currently under an International Monetary Fund programme that requires it to secure about USD 12.5 billion in rollovers from key partners, including China, Saudi Arabia, and the UAE, to maintain reserve levels and meet external financing needs.
The latest data, as reported by Dawn, places Pakistan's central bank reserves at approximately USD 16.3 billion. A repayment of around USD 3 billion could reduce reserves by nearly 18 per cent, significantly weakening the country's external buffer and import cover.
Officials acknowledged that the repayment would impact reserves, but said the decision was taken in light of evolving bilateral considerations and the UAE's demand for immediate settlement.
Economic analysts warned that the move could increase pressure on Pakistan's currency and complicate its position under the IMF programme if not offset by fresh inflows. However, no immediate replacement financing arrangements were indicated.
Meanwhile, Pakistan's Finance Ministry said in a post on X that it is "continuously monitoring and managing Pakistan's external flows to ensure stable foreign exchange reserves".
{{{{twitter_post_id####}}}}In response to speculation and commentary in some section of the media regarding the Government of Pakistan’s external flows, it may be noted that Ministry of Finance is continuously monitoring and managing Pakistan’s external flows in order to ensure stable foreign exchange…— Ministry of Finance, Government of Pakistan (@Financegovpk) April 3, 2026
Meanwhile, the National Assembly of Pakistan was unable to address an extensive 90-point agenda after opposition lawmakers launched a fierce demonstration against a massive surge in fuel prices, Dawn reported.
The legislative session on Friday was disrupted by an outcry over a record-breaking hike of 43 per cent in petrol prices and a 55 per cent jump in high-speed diesel (HSD) rates.
The revised prices, which now stand at PKR 458.4 per litre for petrol and PKR 520.35 per litre for HSD, were disclosed late Thursday night. According to Dawn, the government attributed the spike to a global fuel crisis triggered by the ongoing conflict in the Middle East.
As the opposition launched its protest, Deputy Speaker Ghulam Mustafa Shah was forced to adjourn the sitting without completing any official business. The session was intended to cover a question hour, a calling attention notice regarding solar net metering policies, and several legislative bills.
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