UAE Agrees to Rollover $2bn Loan for Two Months
On 13 February 2026, it was confirmed that the United Arab Emirates (UAE) agrees to rollover $2bn loan for two months to Pakistan. This extension allows Islamabad additional time to manage its external financing obligations and provides crucial financial relief as Pakistan prepares for a key International Monetary Fund (IMF) review.
This strategic rollover — set to run until 17 April 2026 — carries an interest rate of 6.5% and offers short-term breathing room for Pakistan’s foreign exchange reserves. Economists see this move as a timely support that can help stabilize the country’s external accounts during a period of economic pressure.
Why This Rollover Matters Now
The UAE agrees to rollover $2bn loan for two months at a time when Pakistan’s foreign exchange reserves are under strain. The country is simultaneously engaged in negotiations with the IMF for the third review of its $7 billion Extended Fund Facility.
This rollover is significant because it:
- Delays repayment of a $2 billion deposit with the State Bank of Pakistan
- Provides Pakistan with additional time to secure longer-term financial arrangements
- Eases immediate pressure on foreign reserves
- Supports IMF expectations and smooths the release of upcoming tranches
The extension demonstrates strong diplomatic coordination between Islamabad and Abu Dhabi, highlighting the UAE’s continued confidence in Pakistan’s financial management.
For more details on the UAE’s leadership and ongoing support to Pakistan, see our internal coverage UAE President Sheikh Mohamed bin Zayed .
Details of the Rollover Agreement
Extension Terms
- The UAE has agreed to extend the $2bn deposit for two months
- Interest is set at 6.5%
- Final approvals from UAE authorities are still pending
Officials indicated that the rollover was negotiated through direct engagement between senior Pakistani and Emirati officials, demonstrating the strong bilateral relationship.
Broader Economic Context
Impact on the IMF Programme
The rollover plays a critical role in Pakistan’s economic outlook, particularly in ensuring that IMF expectations are met. Analysts note that such support from friendly countries provides confidence to external creditors.
Pakistan is pursuing:
- Completion of the third IMF review
- Unlocking the $1 billion fourth tranche of the IMF program
- Maintaining compliance with IMF conditions to secure continued financial support
By extending the deposit, the UAE helps Pakistan maintain stability in its external accounts, which is essential for macroeconomic confidence and ongoing negotiations with other international creditors.
What Analysts Say
Economic experts highlight that short-term rollovers provide relief but also underscore deeper economic challenges:
- Heavy reliance on external deposits for financing
- Need for longer-term arrangements with friendly nations
- Requirement for structural reforms to ensure sustainable growth
This particular rollover is considered a temporary bridge, giving Pakistan the time to meet IMF targets while working on broader financial stabilization measures.
Next Steps for Pakistan
With the two-month extension secured, Pakistan will:
- Continue discussions with the UAE regarding potential long-term rollover options
- Seek additional support from other key partners like Saudi Arabia and China
- Focus on fulfilling IMF conditions to ensure the smooth release of further tranches
Officials emphasize that this rollover provides Pakistan with an opportunity to strengthen its economic position before the next IMF review concludes.
Key Takeaways from the UAE Loan Rollover
The announcement that the UAE agrees to rollover $2bn loan for two months is a critical development in Pakistan’s economic strategy. It highlights strong bilateral relations, offers short-term financial relief, and provides Pakistan with additional time to align with IMF requirements.
As Pakistan navigates foreign exchange challenges and IMF negotiations, this rollover strengthens confidence in the country’s ability to manage external financing pressures while laying the groundwork for longer-term economic stability.
This move provides Islamabad crucial time to implement reforms, meet IMF conditions, and negotiate further support from international partners, strengthening the country’s prospects for sustained economic stability
