Pakistan has requested a $10 billion currency stabilization facility from the United States to shore up its foreign exchange market, according to Reuters sources. The request—potentially a lifeline for Pakistan’s fragile economy—follows Islamabad’s diplomatic role in facilitating talks related to the conflict in Iran. That mediation effort has elevated Pakistan’s regional diplomatic profile and raised expectations of tangible economic benefits from Washington and other international partners.
A Bilateral Support Mechanism
The proposal, presented to U.S. Treasury Secretary Scott Bessent during Pakistani Finance Minister Muhammad Aurangzeb’s visit to Washington on Tuesday, July 21, 2026, calls for a five-year bilateral support arrangement between the U.S. and Pakistan. If approved, the facility would bolster Pakistan’s foreign exchange reserves, ease pressure on the rupee, and reduce reliance on multilateral financing—even as Islamabad continues implementing strict fiscal and monetary policies under its International Monetary Fund (IMF) program.
During the meeting, Finance Minister Aurangzeb emphasized Pakistan’s economic exposure to regional geopolitical developments. According to official statements, he urged greater U.S. support for Pakistan’s market-oriented reforms, including improved access to international capital markets, higher foreign exchange reserves, and upgraded credit ratings. Both sides reaffirmed their commitment to deepening bilateral economic cooperation, expanding U.S. investment, and advancing strategic infrastructure projects.
Context: IMF Dependence and Past Crises
Pakistan remains under an IMF program that includes a $7 billion loan package, accompanied by tax hikes, spending cuts, and structural reforms. The country narrowly avoided sovereign default in 2023 through a $3 billion IMF standby arrangement, later expanded into the current $7 billion financing facility.
Currency stabilization facilities are rare tools in U.S. public finance—typically administered through the Exchange Stabilization Fund (ESF). These instruments provide dollars, currency swaps, or guarantees to support central bank reserves and maintain monetary stability. Unlike permanent U.S. dollar swap lines—such as those with major central banks—the ESF-backed facilities are ad hoc and designed for crisis response.
Similar arrangements have been extended to Argentina in 2025 and Uruguay in 2002. Mexico maintains the longest-standing U.S. currency swap line, dating back to the 1940s and currently valued at $9 billion.