IMF wants UAE deposit rollover for at least a year

ISLAMABAD (Mudassar Ali Rana) – The visiting delegation of the International Monetary Fund (IMF) has asked Pakistani authorities to ensure that the UAE rolls over its $2 billion deposit with the State Bank (SBP) for at least one year as discussions continue under the ongoing review of the country’s external financing programme.

According to well-placed sources, IMF officials asked questions during technical talks with central bank authorities regarding the status of the UAE’s $2 billion deposit which has yet to receive a formal written confirmation for a one-year rollover. The SBP officials reportedly assured the delegation that positive progress is expected during the course of negotiations.

There is also a possibility of a meeting between IMF representatives and the UAE ambassador in this regard.

Uncertainty surrounding the rollover has added to the financial pressures on the government. Deputy Prime Minister and Foreign Minister Ishaq Dar informally stated that the UAE would not withdraw the $2 billion from Pakistan’s foreign exchange reserves and that discussions for rollover are ongoing. He expressed confidence that the renewed arrangement would likely be for a longer duration.

Finance Minister Muhammad Aurangzeb also confirmed after a meeting of the National Assembly’s Standing Committee on Finance that Pakistan is in contact with the UAE over the rollover and is implementing the external financing plan agreed with the IMF.

Responding to media queries he remarked that the government not the media should be concerned about the matter adding that negotiations with the UAE were underway.

A senior government official, speaking on condition of anonymity, confirmed that the government was engaged in further talks to extend the deposits.

During technical sessions in Karachi, IMF officials and SBP authorities discussed foreign exchange reserves, monetary policy, exchange rate management, anti-terror financing and anti-money laundering measures, as well as banking regulations. The delegation is scheduled to continue talks with central bank officials for two more days.

Officials informed the IMF that Pakistan’s current account posted a surplus of $121 million in January compared to a deficit of $393 million in January 2025. During the first seven months of fiscal year 2026, the current account recorded a deficit of $1.74 billion, against a surplus of $564 million during the same period last year, indicating mounting pressure on external accounts.

Sources revealed that the UAE currently holds $3 billion in deposits with the SBP. Of this, two $1 billion tranches matured in January and were initially rolled over for short periods. The latest two-month extensions are set to expire in mid and late April. The third $1 billion tranche is also approaching maturity and is expected to be rolled over.

The delegation is also scheduled to meet representatives of the Overseas Investors Chamber of Commerce and Industry during its stay in Karachi as part of the ongoing review process.