ISLAMABAD: Pakistan on Saturday rejected what it called “misleading and unfounded” commentary on financial deposits from the United Arab Emirates, saying the return of funds held with its central bank was a “routine financial transaction,” while also condemning an incident of vandalism targeting the UAE embassy in Damascus in a separate statement.
The statement by the foreign office about the UAE deposits came a day after Pakistan’s finance ministry said the country remained committed to meeting all its external obligations.
Local media reports had suggested Islamabad was set to return about $3.5 billion in loans to the UAE this month, with some saying the Gulf state had asked for the immediate return of funds amid the Iran war, raising concerns about Pakistan’s external financing position.
“The Ministry of Foreign Affairs categorically rejects the recent misleading and unfounded commentary regarding financial deposits from the United Arab Emirates (UAE) held with the State Bank of Pakistan (SBP),” it said.
The statement added that the deposits had been placed under bilateral commercial agreements and were now being returned as they matured, in line with mutually agreed terms.
Pakistan relies heavily on financial support and rollovers from allies including China, Saudi Arabia and the UAE to maintain foreign exchange reserves required under its $7 billion program with the International Monetary Fund, which runs through September next year.
Reports this week said Pakistan planned to return $450 million on April 11, $2 billion on April 17 and another $1 billion on April 23, although the foreign office statement did not specify any amounts.
Earlier reports had also suggested discussions were underway to convert part of the deposits into investment, while the SBP governor had said last month that at least some UAE funds had been shifted to a monthly rollover arrangement.
In its statement, the foreign office stressed that Pakistan’s ties with the UAE remained strong, describing the relationship as “longstanding” and built on trust and strategic cooperation across multiple sectors.
“Accordingly, pursuant to mutually agreed terms, the Government of Pakistan, through the SBP, is now returning the matured deposits to the UAE. This is a routine financial transaction, and any attempt to portray it otherwise is erroneous and misleading,” it said.
EMBASSY INCIDENT
In a separate statement, the foreign office condemned vandalism targeting the UAE embassy in Damascus, calling it a violation of diplomatic norms and international law.
“Such acts violate the sanctity and security of diplomatic missions, which are protected under international law, including the Vienna Convention on Diplomatic Relations,” it noted.
The incident occurred after protesters gathered outside the UAE embassy in the Syrian capital, with some attempting to storm the premises following a pro-Palestinian demonstration, according to Reuters witnesses and officials.
Pakistan reiterated its commitment to diplomatic norms and emphasized the importance of maintaining peace, stability and mutual respect among states.
It also cited deep-rooted historical links and the role of the late Sheikh Zayed bin Sultan Al Nahyan in fostering relations between the two countries.
