Pakistan’s role in mediating talks over the Iran war boosted its diplomatic standing and raised hopes of economic benefits from international partners. (EPA Images pic) WASHINGTON: Pakistan has asked the US for a US$10 billion exchange stabilisation facility, according to two sources briefed on the matter, which, if approved, could provide a lifeline for the cash-strapped South Asian economy. The request, which is being reported for the first time, follows Pakistan’s role in brokering talks over the Iran war, which raised its diplomatic profile and stirred hopes that it could seek economic gains from Washington and other partners.
Pakistani finance minister Muhammad Aurangzeb made the request in a letter delivered during a meeting with US treasury secretary Scott Bessent on Tuesday, a US official said. In it, Islamabad asked for the creation of a bilateral exchange stabilisation support facility between the US and the Pakistani government worth US$10 billion with a maturity of up to five years. The facility, if agreed to, 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 programme.
The US Treasury declined to comment on the request. Pakistan’s finance ministry did not immediately respond to Reuters’ request for comment outside of Asia business hours. During his meeting with Bessent, Aurangzeb raised the vulnerability of the country’s economy to regional geopolitical developments, his ministry said in a statement that did not mention the request.
“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,” it said, adding that both sides reaffirmed their commitment to deepening bilateral economic cooperation, promoting greater US investment, and advancing strategic projects. Pakistan remains under US$7 billion IMF discipline that has required politically unpopular tax increases, spending restraint and reforms. Exchange stabilisation facilities are rare US Treasury backstops, usually routed via the Exchange Stabilisation Fund, that provide dollars, swaps or guarantees to support reserves and steady currencies.
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