The United Arab Emirates has demanded immediate repayment of $3.5bn from Pakistan, a sum equal to roughly one-fifth of Islamabad's central bank reserves. The recall blindsided both Pakistan's finance ministry and the IMF, since Abu Dhabi had committed to the Fund not to ask for the money before the end of Pakistan's $7bn 2024 bailout programme in 2027. Saudi Arabia stepped in with $3bn in fresh central bank deposits and extended an existing $5bn for more than a year.
Officials and analysts read the move as Abu Dhabi punishing Pakistan for trying to mediate the US-Israeli war on Iran rather than back the Gulf line, and as another sign of the deepening Saudi-UAE rift. Saudi Arabia and Pakistan signed a mutual defence pact in September; the UAE's growing closeness with India sits on the other side of that fault line. A planned $1bn debt-for-equity swap into Pakistan's Fauji Foundation has been scrapped and the cash returned.
Pakistan now holds about $16bn in central bank reserves, of which Saudi deposits account for roughly half — a level of dependence that Pakistani advisers and outside analysts say is itself a risk, given Riyadh's tightening fiscal position. Source: Financial Times, 27 April 2026, Humza Jilani and Andrew England.