Pakistan has formally requested a $10 billion exchange stabilisation facility from the United States, a move that could provide critical relief to its strained reserves and embattled currency.

The request was made to US Treasury Secretary Scott Bessent and seeks a bilateral facility with a maturity of up to five years. If approved, this would represent a rare US Treasury backstop, routed through the Exchange Stabilisation Fund, and would serve as a liquidity lifeline while signalling closer political and economic ties between Washington and Islamabad.

The timing of the request follows Pakistan’s heightened diplomatic profile after brokering talks during the Iran war. Islamabad appears keen to convert its mediation role into tangible economic gains, leveraging its engagement with the Trump administration.

The facility would ease pressure on the rupee, reduce reliance on multilateral financing, and complement Pakistan’s ongoing IMF program, which has already demanded politically difficult reforms such as tax increases and spending restraint.

Pakistan remains under a $7 billion IMF program, with additional loans including a $1.3 billion resilience package for climate and disaster preparedness. Despite these inflows, its reserves remain vulnerable to external shocks and dependent on bilateral deposits from China and Saudi Arabia.

In April, Pakistan had to repay $3.5 billion to the United Arab Emirates, amounting to one-fifth of its reserves, before Saudi Arabia stepped in with $3 billion in support. The central bank has projected reserves could reach $20 billion by the end of 2026, close to their 2021 peak, but this depends heavily on continued external financing.

Exchange stabilisation facilities are distinct from the permanent dollar swap lines maintained by the US Federal Reserve with major central banks. They are rare instruments, with Argentina’s 2025 package being the first new operation since Uruguay in 2002, aside from Mexico’s long-standing swap line dating back to the 1940s.

For Pakistan, securing such a facility would not only provide liquidity but also carry significant political weight, reinforcing its ties with Washington at a time of regional volatility.

Global ratings agency Fitch recently noted that Pakistan’s adherence to IMF-backed reforms has supported its funding capacity and rebuilt foreign exchange buffers.

However, Fitch also warned that rising energy costs and potential supply disruptions could erode reserves. Foreign investment remains limited due to recurring crises, policy uncertainty, security risks, and a narrow export base. Pakistan’s credit rating remains deep in speculative-grade territory, keeping borrowing costs high and restricting market access.

Islamabad has sought to broaden cooperation with the Trump administration beyond traditional finance. It has signed a stable-coin agreement for cross-border payments with World Liberty Financial, a crypto business linked to President Trump’s family.

It has also pursued redevelopment of the Roosevelt Hotel in New York through a memorandum of understanding with the US government and courted American mining investment, including in the Reko Diq project, where the US Export-Import Bank has announced $1.2 billion in financing. These initiatives reflect Pakistan’s attempt to recast ties with Washington, combining diplomacy, financial stabilisation, and investment partnerships.

The $10 billion request, if granted, would mark a turning point in Pakistan’s economic trajectory, offering both immediate relief and a symbolic deepening of its relationship with the United States. It underscores Islamabad’s strategy of leveraging geopolitical engagement for economic survival while navigating the constraints of IMF discipline and regional instability.

Agencies