As cash-strapped Pakistan tried to mediate an end to the US-Israeli war on Iran, the UAE made a shock request of its longtime ally — repay $3.5bn immediately.
Abu Dhabi’s request this month threatened to drain a fifth of Pakistan’s central bank reserves and imperilled a $7bn IMF bailout programme agreed in 2024. Saudi Arabia, which signed a mutual defence pact with Islamabad last year, swung to the rescue with $3bn in fresh central bank deposits and the extension of an existing $5bn in deposits for more than a year.
Abu Dhabi’s decision reflects its growing frustration with Islamabad, partly because of its deepening ties with Riyadh, but also what it considers Pakistan’s meek response to Iranian attacks on the Gulf after the US and Israel launched their war, analysts say.