ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb said on Wednesday that Islamabad was in talks with the UAE on rolling over its $2 billion loan, clarifying that there was no cause for concern over the matter. 

The UAE has rolled over deposits worth $2 billion with Pakistan’s central bank since 2023, helping the South Asian country shore up its foreign exchange reserves.

The loan first matured in January this year and again in February. However, Pakistan’s central bank has not made any announcement about its status. 

“We are directly in communication with them [UAE],” Aurangzeb told reporters in response to a question about whether the Gulf country had officially rolled over the loan or not. 

“There is absolutely no issue with the rollover. I want to be very categorical.”

Loan rollovers from China, Saudi Arabia and the UAE are crucial for Pakistan as its fragile economy has struggled for decades with boom-and-bust cycles. 

The UAE is Pakistan’s third-largest trading partner after China and the US, and a major source of foreign investment, valued at over $10 billion in the last 20 years, according to the UAE foreign ministry.

It is also home to more than a million Pakistani expatriates, making the country a major source of remittances for Pakistan.