Pakistan Seeks US Financial Support, Shifting from China Reliance

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Pakistan Seeks US Financial Support, Shifting from China Reliance

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This move, confirmed by Aurangzeb in August 2026, signals a strategic shift to reduce dependence on bilateral debt and return to global capital markets.

Pakistan is actively pursuing significant financial backing from the United States, marking a notable departure from its previous reliance on loans from China. Finance Minister Muhammad Aurangzeb stated in August 2026 that Pakistan has formally requested a $10 billion Exchange Stabilization Support Facility from Washington. This facility is not intended as a traditional loan, but rather as a “confidence signal” to private investors, aiming to bolster currency and foreign exchange stability.

The finance minister emphasized that this initiative is part of a broader strategy to accelerate international borrowing and reduce Pakistan’s dependence on short-term bilateral rollover arrangements. Discussions are reportedly underway with the US Treasury Department, and Pakistan anticipates a response by the end of September 2026. Aurangzeb also highlighted the “very important role” he sees for the Export-Import Bank of the United States (ExIm Bank) and the US International Development Finance Corporation (DFC), noting their “risk appetite for Pakistan.”

This strategic pivot comes as Pakistan aims to return to global capital markets and diversify its creditor profile. In December 2024, China was reported to be Pakistan’s largest creditor, with approximately $28.786 billion in loans. Pakistan’s overall external debt reached $138 billion by March 2026. The country has been implementing a $7 billion, three-year IMF program approved in 2024, which has helped reduce fiscal deficits and inflation, and rebuild reserves. For the fiscal year 2026-27, Pakistan plans to raise $4.53 billion through commercial channels, including international bonds and foreign commercial bank loans, a fivefold increase in bond market borrowing compared to the previous year.

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