- Pakistan has requested a $10 billion exchange stabilisation facility from the US Treasury
- The facility aims to support Pakistan's reserves and stabilize its currency for up to five years
- Pakistan faces severe economic challenges despite ongoing IMF bailout programs and reforms
Cash-strapped Pakistan has reportedly knocked on the United States' door, seeking a $10 billion lifeline in a bid to shore up its fragile economy. In the request to US Treasury Secretary Scott Bessent, Islamabad has asked for a 'Bilateral Exchange Stabilisation Support Facility' with Washington worth $10 billion, with a maturity of up to five years, according to a report by news agency Reuters.
The facility request comes as Pakistan continues to grapple with the aftermath of its worst economic crisis in decades despite an ongoing International Monetary Fund (IMF) bailout programme. It follows Islamabad's mediation efforts during the US-Iran war, which raised its diplomatic profile and stirred hopes that it could seek economic gains from Washington and other partners.
If approved, the facility could provide a lifeline for the cash-strapped South Asian economy. It would bolster Pakistan's reserves, ease pressure on the rupee, and reduce its reliance on multilateral financing, even as Islamabad undertakes tighter fiscal and monetary policies in line with its International Monetary Fund program, according to the Reuters report.
Neither Pakistan nor the US has issued any statement on the matter yet.
Pakistani Finance Minister Muhammad Aurangzeb, however, said he had raised the vulnerability of the country's economy to regional geopolitical developments during his meeting with Scott Bessent this week.
"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," Pakistan's Foreign Ministry said in a statement, adding that both sides reaffirmed their commitment to deepening bilateral economic cooperation, promoting greater US investment, and advancing strategic projects.
Pakistan's Economy In Perils
Pakistan remains under a $7 billion IMF programme that has required the implementation of politically sensitive fiscal reforms, including higher taxes, spending restraint, and structural changes. The country narrowly averted a sovereign default in 2023 after securing a $3 billion IMF standby arrangement.
It later obtained a $7 billion Extended Fund Facility, along with an additional $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.
In January, Pakistan's central bank said that its reserves could return to near their 2021 record, reaching $20 billion by the end of 2026.
What Are Exchange Stabilisation Facilities
Exchange stabilisation facilities are uncommon financial arrangements provided by the US Treasury through the Exchange Stabilisation 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.
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.
