Pakistan Seeks $10 Billion US Financial Support

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Pakistan Seeks $10 Billion US Financial Support

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Pakistan has formally sought a $10 billion Exchange Stabilization Support Facility from the United States. This initiative aims to strengthen foreign exchange stability and project a positive signal to international capital markets. Finance Minister Muhammad Aurangzeb confirmed the request, indicating that negotiations are underway with the US Treasury Department. The proposed facility, with a maturity of up to five years, is intended to provide an important financial buffer, enhance investor confidence, and reduce short-term external financing risks.

This request comes as Pakistan endeavors to move away from a financing model heavily reliant on loans and rollovers from friendly nations. The country is currently implementing a $7 billion International Monetary Fund (IMF) assistance program agreed upon in 2024. Pakistan’s government is also actively working to improve its sovereign credit rating, which Finance Minister Aurangzeb noted had remained unchanged since 2003-04.

Khurram Schehzad, an advisor to the Finance Minister on Economic & Financial Reforms, appointed in November 2024, has emphasized the constructive nature of the engagement with the US regarding this facility. The goal is to achieve market-based financing with longer repayment timelines. An improved sovereign rating is expected to facilitate easier access to international markets for Pakistan. The US has previously utilized its Exchange Stabilization Fund to assist other economies, and if approved, this would represent a significant bilateral financial arrangement between Washington and Islamabad.

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