In a bid to strengthen its economy, Pakistan has reportedly sought a $10 billion exchange stabilization facility from the United States.
Following its diplomatic role in the Iran war negotiations, Pakistan’s international standing has seen a boost, sparking hopes of economic benefits from Washington and other partners. In a letter to Treasury Secretary Scott Bessent, Islamabad proposed a Bilateral Exchange Stabilization Support Facility between the U.S. and Pakistan, valued at $10 billion with a maturity of up to five years, Reuters reported on Wednesday.
Pakistani Finance Minister Muhammad Aurangzeb met with Bessent in Washington on Tuesday, discussing Pakistan’s economic vulnerability to regional geopolitical developments. The ministry’s statement did not mention the request but emphasized Aurangzeb’s plea for more U.S. support for Pakistan’s economic journey.
If approved, the facility could strengthen Pakistan’s foreign exchange reserves, support the rupee, and lessen the country’s dependence on multilateral financing. The move comes as Islamabad implements tighter fiscal and monetary measures under its International Monetary Fund (IMF) program, as per the report.
The Treasury Department did not immediately respond to Benzinga’s request for comments.
Pakistan Faces Funding Pressure
The request for a backstop facility comes on the heels of a similar financial aid extended to Argentina.
In October, the Treasury Department, under Bessent, had finalized a $20 billion financial lifeline for Argentina in the form of a currency swap, allowing Argentina’s central bank to exchange pesos for U.S. dollars. This move had earned Argentina’s President Javier Milei also visited the White House, where he met with President Donald Trump, Bessent, and top U.S. officials to finalize the arrangement.
The 2025 Argentina package marked the first new foreign-government exchange stabilization facility operation since Uruguay in 2002, excluding Mexico’s long-standing swap line, which dates back to the 1940s and is now valued at $9 billion.
As for Pakistan, it remains reliant on a $7 billion IMF bailout program, which has required unpopular tax hikes, spending cuts, and economic reforms. Although it avoided default in 2023 and has received additional support for climate resilience, its foreign exchange reserves still depend heavily on financing and rollovers from countries such as China and Saudi Arabia, leaving the economy vulnerable to delays in IMF funding and changes in external support.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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