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News India Live, Digital Desk: Another major diplomatic and financial crisis has arisen for Pakistan, which is struggling with economic crisis. United Arab Emirates (UAE) gave to Pakistan US$3.5 billion (about Rs 29,000 crore) An order has been given to repay the loan immediately. This decision has come at a time when clouds of war are looming in the Middle East and Pakistan’s increasing military closeness with Saudi Arabia has angered the UAE. With a heavy heart, Pakistan has now decided to return the entire amount by the end of this month.
‘Defense deal’ with Saudi Arabia becoming a pain in the neck?
According to insiders, the main reason for this anger of UAE was the conflict between Pakistan and Saudi Arabia. ‘Strategic Mutual Defense Agreement’ (SMDA) Is. Under this secret defense deal signed in September 2025, Pakistan has promised to provide military security to Saudi Arabia. Given the increasing competition between Saudi Arabia and UAE in regional politics, Abu Dhabi has considered Pakistan’s move as a kind of ‘betrayal’. This is the reason why the loan which till now could easily be ‘rolled over’ (extended period), has now been demanded back by UAE under any circumstances till 17th April.
‘Treasury’ was deposited in State Bank, now the treasury will be empty
According to ‘Geo News’ report, this huge amount of $3.5 billion was kept as a ‘safe deposit’ with the State Bank of Pakistan (SBP), which Pakistan used to show its foreign exchange reserves were stable. Pakistan on this amount hefty interest of 6 percent Was also paying. The UAE had stopped extending the tenure of this loan since December 2025—first it was postponed for one month and then for two months, but now the final deadline has been fixed for April 17.
Shortage of funds or diplomatic pressure?
The UAE has officially cited the ongoing Iran-US war in the Middle East as the reason for the withdrawal of funds, in which it is in urgent need of its resources. However, there is discussion in diplomatic circles that this is like teaching a lesson to Pakistan for its ‘two-pronged’ policy. In the current financial year, Pakistan also needs rollover of $5 billion from Saudi Arabia and $4 billion from China. If other countries follow the UAE’s example and withdraw, then the threat of bankruptcy may arise again for Pakistan.
There will be a direct impact on foreign exchange reserves
Presently Pakistan has about 21 billion dollars in foreign exchange reserves. Technically, Pakistan is capable of repaying this debt, but the withdrawal of $3.5 billion in one go may cause the Pakistani rupee to dive again. In the coming months, Pakistan may once again have to approach international financial institutions to repay its other debts. Saudi Arabia’s military help and Riyadh’s support in the Iran conflict is now costing Pakistan a lot on the economic front.
