Reuters: Pakistan seeks $10 billion US exchange stabilization facility

Pakistan has asked the United States to establish a $10 billion exchange stabilisation facility to help strengthen its economy, Reuters reports, citing a source familiar with the matter.

The request follows Islamabad's role in mediating talks related to the Iran conflict, a diplomatic effort that has raised expectations the country could secure greater economic support from Washington.

According to the source, Pakistan formally requested a five-year Bilateral Exchange Stabilisation Support Facility in a proposal submitted to US Treasury Secretary Scott Bessent.

If approved, the facility would help boost Pakistan's foreign exchange reserves, ease pressure on the rupee and reduce the country's dependence on multilateral financing while it continues implementing fiscal and monetary reforms under its International Monetary Fund (IMF) programme.

The US Treasury declined to comment on the reported request, while Pakistan's Finance Ministry did not immediately respond to Reuters' request for comment.

Pakistani Finance Minister Muhammad Aurangzeb met Bessent in Washington on Tuesday. According to the ministry, Aurangzeb highlighted Pakistan's economic vulnerability to regional geopolitical developments and called for stronger US support.

"Senator Aurangzeb sought greater U.S. 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, adding that both sides reaffirmed their commitment to expanding bilateral economic cooperation, encouraging US investment and advancing strategic projects.

Pakistan remains under a $7 billion IMF programme that requires fiscal reforms, higher taxes and spending restraint.

Exchange stabilisation facilities are uncommon financial arrangements through which the US Treasury can provide dollar support, currency swaps or guarantees to help stabilise foreign exchange reserves and national currencies.

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 to climate change and natural disasters.

Despite those agreements, the country's foreign exchange reserves remain heavily dependent on official financing, loan rollovers and deposits from countries including China and Saudi Arabia, leaving Islamabad vulnerable to shifts in external financial support.

By Bakhtiyar Abbasov