Pakistan has asked the U.S. for a $10 billion exchange stabilisation facility, according to a source briefed on the matter. If approved, the funding would bolster the country’s foreign exchange reserves and provide a major boost to its cash-strapped economy.
Details of the request
According to the source, Islamabad has asked U.S. Treasury Secretary Scott Bessent for a bilateral Exchange Stabilisation Support Facility between the U.S. and the Pakistani government worth $10 billion, with a maturity of up to five years.
If approved, the facility would strengthen Pakistan’s foreign exchange reserves and ease pressure on the rupee. It would also reduce Islamabad’s dependence on multilateral financing as the country implements stricter fiscal and monetary policies under its International Monetary Fund (IMF) programme.
The U.S. Treasury declined to comment on the reported request.
Pakistan’s finance ministry did not immediately respond to Reuters’ request for comment outside Asian business hours.
Pakistani Finance Minister Muhammad Aurangzeb met Bessent in Washington on Tuesday and said he had raised the vulnerability of the country’s economy to regional geopolitical developments, the ministry said in a statement.
Pakistan remains under a $7 billion IMF programme that has required politically unpopular tax increases, spending restraint and economic reforms.
Exchange stabilisation facilities are rare U.S. Treasury backstops, usually provided through the Exchange Stabilization Fund, that offer dollars, currency swaps or guarantees to support foreign exchange reserves and stabilise currencies.
Pakistan narrowly avoided default in 2023 with a $3 billion IMF standby arrangement and later secured a $7 billion Extended Fund Facility, along with a separate $1.3 billion loan to strengthen its resilience to climate change and natural disasters.
However, its foreign exchange reserves remain heavily dependent on official financing, debt rollovers and deposits from China and Saudi Arabia.
That leaves Islamabad exposed to shifts in bilateral support and delays to IMF disbursements. The vulnerability was highlighted in April when Pakistan repaid about $3.5 billion – around one-fifth of its foreign exchange reserves – to the United Arab Emirates, while Saudi Arabia provided $3 billion in fresh support.
Resetting relations with Washington
Foreign investment in Pakistan has remained limited because of repeated external crises, policy uncertainty, security concerns, restrictions on profit repatriation and a narrow export base.
Pakistan has sought to use its ties with the Trump administration to address some of these challenges through economic cooperation spanning cryptocurrency, real estate and mining.
Pakistan has signed a stablecoin agreement for cross-border payments with an affiliate of World Liberty Financial, the main cryptocurrency business of U.S. President Donald Trump’s family.
It is also seeking a memorandum of understanding with the U.S. government to redevelop the closed Roosevelt Hotel in New York, which is owned by Pakistan International Airlines.
Pakistan has also attracted U.S. mining investment, including in Reko Diq, where the U.S. Export-Import Bank has pledged $1.25 billion in financing.
