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Pakistan has sought a USD 10 billion exchange stabilisation facility from the United States in a bid to strengthen its foreign exchange reserves and reduce pressure on its economy, Reuters reported, citing a source familiar with the matter.
According to Reuters' report, Islamabad has requested a Bilateral Exchange Stabilisation Support Facility worth USD 10 billion with a maturity of up to five years in a request made to US Treasury Secretary Scott Bessent. The reported request comes after Pakistani Finance Minister Muhammad Aurangzeb met Bessent in Washington on Tuesday. If approved, the facility would help bolster Pakistan's foreign exchange reserves, ease pressure on the Pakistani rupee and reduce the country's reliance on multilateral financing while it continues implementing fiscal and monetary reforms under its International Monetary Fund (IMF) programme, as reported by Reuters. According to a statement issued by Pakistan's Finance Ministry, Aurangzeb highlighted the vulnerability of Pakistan's economy to regional geopolitical developments and sought greater US support for the country's efforts to improve market access, increase foreign exchange reserves and enhance its sovereign credit ratings. "Finance Minister Senator Muhammad Aurangzeb briefed the US Treasury Secretary on Pakistan's journey toward macroeconomic stability, sustainable, and export-led growth. The Finance Minister also highlighted the negative impacts of the regional situation on the Pakistani economy," the statement read. "Desire for US cooperation regarding improved access to international capital markets, enhancement in foreign exchange reserves, and increased market access based on sovereign credit ratings," it added. The statement added that both sides reaffirmed their commitment to strengthening bilateral economic cooperation, encouraging greater US investment and advancing strategic projects. Pakistan remains under a USD 7 billion IMF programme that has required the implementation of politically sensitive fiscal reforms, including higher taxes, spending restraint and structural changes. Exchange stabilisation facilities are uncommon financial arrangements provided by the US Treasury through the Exchange Stabilization Fund. They are designed to support a country's foreign exchange reserves and stabilise its currency through dollar funding, swap arrangements or guarantees, Reuters reported. According to Reuters, such facilities are distinct from the US Federal Reserve's standing dollar swap lines with major central banks. The last major foreign-government exchange stabilisation package before Argentina's 2025 arrangement was extended to Uruguay in 2002, while Mexico has maintained a long-standing swap line with the United States since the 1940s. Pakistan narrowly averted a sovereign default in 2023 after securing a USD 3 billion IMF standby arrangement. It later obtained a USD 7 billion Extended Fund Facility, along with an additional USD 1.3 billion loan aimed at strengthening resilience against climate change and natural disasters. Despite these measures, Pakistan's external reserves continue to depend heavily on IMF disbursements, bilateral support and financial rollovers from partners including China and Saudi Arabia, leaving the country vulnerable to delays in external financing, as reported by Reuters. (ANI)
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