Pakistan Seeks $10 Billion to Bolster Foreign Exchange Reserves

Pakistan asked the United States to establish a $10 billion bilateral currency support facility to strengthen its foreign exchange reserves and stabilize the rupee, according to a source familiar with the matter, in a move that could significantly ease pressure on the country's fragile economy if approved.

The previously unreported request comes after Islamabad played a diplomatic role in facilitating talks related to the conflict involving Iran, raising expectations that its growing strategic importance could translate into stronger economic support from Washington.

According to the source, Pakistan has formally requested that U.S. Treasury Secretary Scott Bessent establish a five-year bilateral exchange-rate stabilization facility worth $10 billion.

If approved, the mechanism would provide Pakistan with an additional financial buffer by strengthening its foreign exchange reserves, supporting the value of the rupee, and reducing the country's dependence on multilateral lenders as it continues implementing fiscal and monetary reforms under its International Monetary Fund (IMF) program.

Pakistani Finance Minister Muhammad Aurangzeb met Bessent in Washington on Tuesday. In a statement, Pakistan's Finance Ministry said the discussions focused on the country's vulnerability to geopolitical developments in the region but made no reference to the proposed financing request.

The ministry added that Aurangzeb called for greater U.S. support in improving Pakistan's access to international capital markets, rebuilding foreign exchange reserves, and strengthening its sovereign credit profile. Both sides also reaffirmed their commitment to expanding bilateral economic cooperation, encouraging U.S. investment, and advancing strategic joint projects.

Pakistan remains under a $7 billion IMF lending program, which has required tax increases, spending restraint, and broad economic reforms aimed at restoring macroeconomic stability.

A U.S.-backed exchange-rate stabilization facility would represent an uncommon form of financial assistance. Unlike the Federal Reserve's permanent swap lines with major central banks, such facilities can provide emergency dollar liquidity, currency swaps, or financial guarantees to help countries stabilize their currencies and financial systems.

The United States last introduced a similar arrangement for Argentina in 2025, marking the first new facility of its kind since its agreement with Uruguay in 2002. The U.S. also maintains a long-standing $9 billion swap line with Mexico, which has been in place for decades.

Pakistan narrowly avoided a sovereign default in 2023 after securing a $3 billion emergency IMF package, followed by the current $7 billion Extended Fund Facility and an additional $1.3 billion climate resilience loan.

Despite those programs, the country's reserve position remains heavily dependent on official financing, deposit rollovers, and financial support from partners including China and Saudi Arabia.

The vulnerability of Pakistan's reserve position was highlighted in April, when the country repaid approximately $3.5 billion to the United Arab Emirates, roughly one-fifth of its foreign exchange reserves, before receiving a fresh $3 billion financial package from Saudi Arabia.

Pakistan's central bank projected in January that reserves would rise to approximately $20 billion by the end of 2026, approaching the record levels reached in 2021.

Analysts say securing a U.S.-backed stabilization facility would carry both economic and geopolitical significance. Beyond providing an additional liquidity buffer, the arrangement could ease pressure on Pakistan's currency, strengthen investor confidence, and reduce the country's reliance on periodic IMF disbursements and emergency rescue packages.

Earlier this year, Fitch Ratings said Pakistan's adherence to its IMF reform program had improved access to external financing and helped rebuild foreign exchange reserves, providing some protection against economic shocks stemming from geopolitical tensions in the Middle East.

However, the agency warned that higher energy prices or prolonged supply disruptions could quickly erode those reserves.

Pakistan is also seeking to deepen economic cooperation with the administration of U.S. President Donald Trump, focusing on sectors including digital assets, real estate, and mining.

Islamabad recently signed an agreement on stablecoin-based cross-border payments with a company affiliated with World Liberty Financial, the cryptocurrency venture linked to the Trump family.

The government is also working on a memorandum of understanding with U.S. authorities to redevelop New York City's Roosevelt Hotel, owned by Pakistan International Airlines, while continuing efforts to attract American investment into the country's mining sector, including the Reko Diq copper and gold project, for which the U.S. Export-Import Bank has announced $1.25 billion in financing.