The United Arab Emirates has agreed to extend the rollover of a $2 billion loan to Pakistan for an additional two months, delivering timely financial support as Islamabad moves closer to completing a key economic review with the International Monetary Fund. The development provides short-term breathing space for Pakistan’s external account at a sensitive stage of its IMF engagement.
According to the Finance Ministry, the UAE has approved the extension of the facility until April 16 and April 22, respectively. The loan had earlier been rolled over for one month, with its previous maturities scheduled for February 16 and February 22. The latest decision effectively defers immediate repayment pressure while the government works through ongoing discussions tied to its IMF program.
Pakistan had initially requested a two-year rollover of the $2bn facility to provide longer-term stability to its foreign exchange reserves. However, in the interim, authorities sought a temporary extension to safeguard reserve levels and ensure a smooth conclusion of the IMF’s economic assessment. The extension is seen as a strategic step to maintain external sector stability ahead of the review outcome.
Officials familiar with the matter noted that finalizing the rollover strengthens Pakistan’s position as it approaches the IMF evaluation. Maintaining reserve buffers remains a central requirement under the IMF framework, particularly as the country navigates debt servicing obligations and external financing commitments. The short-term extension from the UAE helps avoid any abrupt drawdown in reserves that could complicate the review process.
The IMF review is considered critical for unlocking subsequent disbursements and reinforcing market confidence in Pakistan’s reform trajectory. Ensuring continuity in bilateral financial support, especially from long-standing partners such as the UAE, plays a significant role in sustaining macroeconomic stability during this period. Once the review is successfully concluded, Islamabad intends to reopen discussions with Emirati authorities to negotiate a longer-term rollover arrangement for the $2bn loan.
The move highlights Pakistan’s continued reliance on financial backing from friendly countries to manage near-term external financing gaps. Alongside multilateral lenders, bilateral partners remain an essential component of the country’s external funding structure. Such support mechanisms provide stability while broader structural reforms and fiscal adjustments are implemented under IMF oversight.
In recent years, rollover arrangements from allied nations have become a recurring feature of Pakistan’s external financing strategy, helping authorities meet repayment schedules without eroding foreign exchange buffers. The latest extension from the UAE reinforces that pattern, offering immediate liquidity relief while longer-term negotiations remain under consideration.
As Pakistan advances through the IMF review process, securing predictable external financing will remain central to its economic roadmap. The two-month rollover extension ensures that Islamabad can proceed with the review discussions without facing immediate repayment stress, while also signaling continued diplomatic and financial backing from the UAE.
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