A knowledgeable source stated that Pakistan has requested a $10 billion facility from the United States to support exchange rate stability, which, if approved, could serve as a lifeline for the financially distressed country's economy.
اضافة اعلان
This request, disclosed for the first time, follows Pakistan's mediating role in talks related to the war with Iran, which boosted its diplomatic standing and raised hopes of securing economic gains from Washington and other partners.
In the request addressed to U.S. Treasury Secretary Scott Bessent, Islamabad sought a $10 billion bilateral exchange rate stabilization facility between the United States and the Pakistani government, with maturities of up to five years.
If approved, the facility would boost Pakistan's reserves, ease pressure on the rupee, and reduce reliance on multilateral funding, even as Islamabad adopts tighter fiscal and monetary policies to meet the requirements of an International Monetary Fund (IMF) program.
The U.S. Treasury Department declined to comment on reports regarding the request.
Pakistan's Ministry of Finance did not immediately respond to Reuters' request for comment outside Asian business hours.
Pakistani Finance Minister Muhammad Aurangzeb met with the U.S. Treasury Secretary in Washington on Tuesday and stated that he raised the issue of the country's economy being impacted by regional geopolitical developments, according to a ministry statement that made no mention of the request.
Pakistan has a $7 billion program with the IMF, which obligates it to raise taxes, enforce spending controls, and implement structural reforms.
Exchange rate stabilization facilities are support measures rarely provided by the U.S. Treasury. They are typically funneled through the Exchange Stabilization Fund (ESF) and involve providing dollars, currency swaps, or guarantees to bolster reserves and stabilize currencies.
Fitch Ratings stated in April that Pakistan's commitment to the IMF program supported the country's financing capabilities, and that the foreign exchange reserves being built acted as a buffer against economic shocks resulting from the Middle East conflict.
However, Fitch warned that rising energy costs and potential supply disruptions could lead to a sharp erosion of the country's foreign exchange reserves.
Reuters
