It is said that trouble never comes alone, and something similar is happening with Pakistan. The country, already grappling with an economic crisis, has now been hit by another major blow.
The United Arab Emirates (UAE) has demanded the immediate repayment of a nearly $2 billion (approximately 16,500 crore rupees) loan given to Pakistan. This decision, taken amidst escalating tensions in the Middle East, could have a severe impact on Pakistan’s economy.
Surprisingly, Pakistan was paying an interest rate of approximately 6% on this amount. The tenure of this loan ended in December 2025, which was first extended by one month and then by two months until April 17. Now, the UAE has flatly refused to extend it further.
In this fiscal year, Pakistan needs to roll over foreign loans worth approximately $12 billion, which includes $5 billion from Saudi Arabia and $4 billion from China.
Currently, Pakistan has foreign exchange reserves of approximately $21 billion. Technically, it is capable of repaying $2 billion, but paying such a large amount at once will put immense pressure on its treasury. In the coming months, Pakistan may need to seek help from new foreign investors or again from the IMF (International Monetary Fund) for its other needs and old loan installments.
