Debt-ridden Pakistan has requested the United Arab Emirates (UAE) to roll over $3 billion in deposits, highlighting its heavy reliance on borrowing from friendly nations and the IMF. This approach, involving repeated rollovers and emergency funding, offers short-term relief but sustains a fragile economic model that hinders domestic reform efforts.
In early January 2026, Pakistan asked the UAE to roll over $3 billion deposited with the State Bank of Pakistan in three $1 billion tranches. This move, initially made in 2021 to bolster Pakistan’s balance of payments and support foreign exchange reserves, reflects the country’s ongoing financial challenges.
Pakistan’s reliance on bilateral partners like Saudi Arabia, the UAE, and China for central bank deposits and commercial loans near repayment deadlines is a systematic strategy. For the current fiscal year, Pakistan anticipates rollovers of approximately $12 billion from these partners alone, underscoring its external account management’s dependence on foreign capital rather than export-driven growth.
The State Bank of Pakistan Governor noted that in fiscal year 2025–26, Pakistan faces total external repayments of about $25.8 billion, with an estimated $9.3 billion to be rolled over. This reliance on rollovers as a routine debt management tool signifies a structural shift in Pakistan’s financial strategy, emphasizing friendly capital over export capacity or productivity-led growth.
Borrowing from the IMF aligns with this pattern, as Pakistan secured a $7 billion Extended Fund Facility in September 2024, backed by financing assurances and rollovers from China, Saudi Arabia, and the UAE. Despite past IMF engagements and the need for reforms, the focus remains on stabilizing Pakistan’s economy rather than fundamentally restructuring its economic model.
