Pakistan Seeks $10bn US Support to Stabilise Foreign Reserves

Pakistan has asked the United States for a $10 billion exchange stabilisation facility, according to a source familiar with the matter. If approved, the facility could help strengthen Pakistan’s foreign exchange reserves, support the rupee and reduce the country’s dependence on international lenders.

The request was reportedly made to US Treasury Secretary Scott Bessent and seeks a Bilateral Exchange Stabilisation Support Facility with a maturity of up to five years.

The request comes after Pakistan’s role in helping facilitate talks related to the US-Iran war, which increased Islamabad’s diplomatic importance and raised hopes for stronger economic ties with Washington.

The US Treasury has not commented on the reported request, while Pakistan’s finance ministry also did not immediately respond.

Finance Minister Muhammad Aurangzeb met Bessent in Washington on Tuesday and discussed Pakistan’s economic challenges linked to regional geopolitical tensions. The finance ministry said Aurangzeb also sought greater US support to improve access to international capital markets, increase foreign exchange reserves and strengthen Pakistan’s credit ratings.

“Senator Aurangzeb sought greater US support for Pakistan’s road to market, underpinned by improved access to international capital markets, higher foreign exchange reserves, and enhanced sovereign credit ratings,” the ministry said.

Pakistan remains under a $7 billion IMF programme that requires tax increases, spending controls and economic reforms. The country has also relied on financial support, loan rollovers and deposits from China and Saudi Arabia to maintain its reserves.

A US exchange stabilisation facility could provide Pakistan with additional financial support and reduce pressure on its reserves and currency. It could also help Islamabad become less dependent on IMF funding and emergency financial assistance.

Pakistan narrowly avoided default in 2023 after securing a $3 billion IMF standby arrangement. It later obtained a $7 billion Extended Fund Facility, along with a separate $1.3 billion loan aimed at strengthening resilience against climate change and natural disasters.

The country’s foreign exchange reserves remain vulnerable to delays in international funding and changes in support from partner countries. Rising energy costs and possible supply disruptions linked to regional conflicts could also put further pressure on reserves.

Pakistan is also working to strengthen economic relations with the United States through cooperation in areas including cryptocurrency, real estate and mining. These efforts include a stablecoin agreement for cross-border payments with an affiliate of World Liberty Financial, a plan involving the Roosevelt Hotel in New York, and efforts to attract US investment in mining projects such as Reko Diq.