Overview
Pakistan has formally requested a $10 billion bilateral Exchange Stabilization Support Facility from the United States, addressed to Treasury Secretary Scott Bessent. The facility is proposed with a maturity of up to five years and is intended to strengthen Pakistan’s foreign‑exchange reserves, alleviate pressure on the Pakistani rupee and reduce the country’s reliance on multilateral financing sources.
Policy Context
The request follows Pakistan’s implementation of tighter fiscal and monetary policies under its International Monetary Fund (IMF) programme. After averting a sovereign default in 2023 with a $3 billion IMF standby arrangement, the government subsequently secured a $7 billion Extended Fund Facility and a separate $1.3 billion loan aimed at building resilience to climate change and natural disasters.
Current Reserve Composition and Vulnerabilities
Pakistan’s reserves continue to depend heavily on official financing, roll‑over facilities and deposits from China and Saudi Arabia, leaving the country exposed to shifts in bilateral support and potential delays in IMF disbursements. In April, Pakistan repaid approximately $3.5 billion—about one‑fifth of its reserves—to the United Arab Emirates, while Saudi Arabia provided $3 billion in fresh support.
Geopolitical Dimension
The request is reported to be bolstered by Pakistan’s enhanced diplomatic standing after it helped broker talks related to the Iran conflict, which may influence the United States’ willingness to extend the facility.