Pakistan has decided to repay a $2 billion loan to the United Arab Emirates (UAE) by the end of the current month, following a request from Abu Dhabi for early repayment, sources said.

The amount, held as a safe deposit in Pakistan’s account, will be transferred to Abu Dhabi in the coming weeks.

According to officials familiar with the matter, Pakistan had been paying around 6 per cent interest on the deposit. The loan had previously been rolled over by the UAE but was recently called back for immediate repayment.

Sources said the facility was extended for a short term in December 2025, before the UAE sought its return under the current arrangement.

Pakistan has now taken a formal decision to repay the amount in full within the stipulated timeframe.

The development comes amid ongoing efforts by Islamabad to manage external financing obligations and maintain foreign exchange stability.