The State Bank of Pakistan (SBP) said the payment had been made, adding that a further $1 billion is due on April 23.

Despite the large outflow, the central bank said the repayment would not impact the country’s foreign exchange reserves.

“Arrangements for external payments are in place,” SBP sources said, stressing that reserves would remain stable and obligations are being met on time.

The latest payment is part of a three-stage schedule approved by Pakistan’s leadership to repay the full $3.5 billion debt to the UAE this month.

Under the plan, $450 million was paid on April 11, followed by $2 billion on April 17, while the final $1 billion instalment is scheduled for April 23.

The loan, originally extended in 2019, was aimed at supporting Pakistan’s balance of payments during a period of economic stress. The decision to repay the full amount comes after months of uncertainty, as Abu Dhabi had shifted from annual to monthly loan rollovers.

External sector support strengthens

The repayments come alongside measures aimed at reinforcing Pakistan’s external financial position.

Earlier, Pakistan secured a $3 billion deposit extension agreement with the Saudi Fund for Development, providing continued support to foreign exchange reserves.

The agreement, signed in Washington during the World Bank-IMF Spring Meetings 2026, was witnessed by Finance Minister Muhammad Aurangzeb.

The extension of the Saudi deposit reflects ongoing economic cooperation between the two countries and is expected to support Pakistan’s external sector stability.

Separately, the central bank, earlier this week, had said it received $2 billion from the kingdom “in the value date of April 15, 2026“.

In a separate development, Pakistan also raised $500 million through a Eurobond issuance a day earlier, further strengthening its liquidity position.

The SBP maintained that despite significant repayments, Pakistan’s external account remains manageable, with sufficient inflows and financing arrangements in place.

The developments signal Islamabad’s effort to meet its financial commitments while maintaining stability in foreign exchange reserves amid ongoing economic challenges.