The Kabul Tribune (KT) — Pakistan has requested a $10
billion exchange stabilization facility from the United States to strengthen
its foreign exchange reserves and reduce pressure on the Pakistani rupee, Reuters
reported, citing a source familiar with the matter.
According to Reuters, the request was made to U.S. Treasury
Secretary Scott Bessent and seeks a bilateral exchange stabilization support
facility with a maturity of up to five years. If approved, the arrangement
would provide Pakistan with a significant financial backstop as it continues
economic reforms under a $7 billion International Monetary Fund (IMF) program.
Reuters reported that the U.S. Treasury declined to comment
on the request, while Pakistan’s Finance Ministry did not immediately respond
to requests for comment outside regular business hours.
Finance Minister Muhammad Aurangzeb met with Bessent in
Washington on Tuesday. In a statement, Pakistan’s Finance Ministry said
Aurangzeb discussed the country’s economic vulnerabilities stemming from
regional geopolitical developments and sought greater U.S. support to improve
Pakistan’s access to international capital markets, increase foreign exchange
reserves and strengthen its sovereign credit profile. The statement did not
mention the reported request for an exchange stabilization facility.
Reuters said the request follows Pakistan’s role in
facilitating talks related to the recent Iran conflict, which raised Islamabad’s
diplomatic profile and fueled expectations that it could seek broader economic
cooperation with Washington.
According to Reuters, exchange stabilization facilities are
rare financial arrangements typically backed by the U.S. Treasury’s Exchange
Stabilization Fund. If approved, the facility would bolster Pakistan’s
reserves, ease pressure on the rupee and reduce dependence on IMF disbursements
and emergency bilateral financing.
Pakistan narrowly avoided sovereign default in 2023 after
securing a $3 billion IMF standby arrangement before later obtaining a $7
billion Extended Fund Facility and a separate $1.3 billion climate resilience
loan. Reuters reported that despite those agreements, Pakistan continues to
rely heavily on official financing, loan rollovers and deposits from countries
including China and Saudi Arabia.
Reuters also reported that Pakistan has recently sought to
deepen economic ties with the United States through cooperation in
cryptocurrency, real estate and mining, including efforts to attract U.S.
investment in the Reko Diq mining project.
