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Islamabad Requests Rare US Financial Backstop
Pakistan has formally requested a $10 billion exchange stabilization facility from the United States to strengthen its foreign exchange reserves and support its fragile economy, according to sources familiar with the matter .
The request was made to US Treasury Secretary Scott Bessent during a meeting with Finance Minister Muhammad Aurangzeb in Washington, D.C. Islamabad is seeking a Bilateral Exchange Stabilization Support Facility with a maturity of up to five years, which would help ease pressure on the Pakistani rupee and reduce the country’s reliance on multilateral financing .
Diplomatic Profile Boosts Economic Hopes
The request follows Pakistan’s diplomatic role in brokering talks over the Iran conflict, which has raised Islamabad’s international profile and stirred hopes of economic gains from Washington and other partners . Analysts note that Pakistan’s unique position—maintaining relationships with both the US and Iran—made it a credible facilitator in the conflict, with Islamabad leveraging its nearly 900-kilometer border with Iran and long-standing strategic partnership with Washington .
Meeting Highlights Economic Vulnerabilities
During the meeting with Bessent, Aurangzeb highlighted Pakistan’s journey from macroeconomic stabilization to sustainable, export-led growth while noting the economy’s vulnerability to regional geopolitical developments .
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 . Both sides reaffirmed their commitment to deepening bilateral economic cooperation, promoting greater US investment, and advancing strategic projects .
Rare US Financial Instrument
Exchange stabilization facilities are rare US Treasury backstops, usually routed via the Exchange Stabilization Fund, that provide dollars, swaps, or guarantees to support reserves and steady currencies . A similar package was approved for Argentina in 2025, marking one of the first such operations for a foreign government in decades .
Pakistan’s Economic Context
Pakistan narrowly avoided sovereign default in 2023 with a $3 billion IMF standby deal and later secured a $7 billion Extended Fund Facility along with a separate $1.3 billion climate resilience loan . However, reserves still depend on official financing, rollovers, and deposits from China and Saudi Arabia.
That vulnerability was exposed in April when Pakistan repaid approximately $3.5 billion to the United Arab Emirates, consuming one-fifth of its reserves. Saudi Arabia subsequently provided $3 billion in fresh support . Pakistan’s central bank has projected reserves could reach $20 billion by the end of 2026
