Does Pakistan want 10 billion dollars in exchange for mediation in Iran war? Big economic demand placed before America

New Delhi: Now a new economic aspect has come to light regarding Pakistan’s alleged mediation in the Iran-America conflict. Pakistan, which tried to pave the way for dialogue between the two countries during the war, has demanded major economic assistance from America. According to the report, Islamabad has sought a currency support facility of $10 billion from the US to strengthen its foreign exchange reserves.

According to a Reuters report, Pakistan has made this proposal to America after playing the role of mediator in the Iran-America conflict. Pakistani officials hope that this initiative will strengthen the country’s foreign exchange reserves and may provide some relief to the economy facing economic crisis.

Pakistan asked for 10 billion dollars help from America

According to sources, Pakistan has requested US Finance Minister Scott Besant to start a bilateral exchange stabilization assistance facility between the two countries. This arrangement can be for a maximum period of five years. The main objective of such a facility is to support the foreign exchange reserves of a country and reduce the pressure on its currency. Pakistan’s economy has been facing challenges like shortage of foreign exchange, weak currency and increasing debt for a long time. In such a situation, the possible assistance from America is considered very important for it.

What will be the benefit of currency support facility?

If America approves this proposal of Pakistan, then it can increase the foreign exchange reserves of Pakistan. Along with this, it can also help in reducing the pressure on Pakistani rupee. Pakistan believes that such economic assistance will help it reduce its dependence on aid from international organizations. However, the country will continue economic reforms under the ongoing program with the International Monetary Fund (IMF).

At present Pakistan is working under IMF program of 7 billion dollars. Under this program, it has had to take many difficult decisions like increasing taxes, controlling government expenditure and implementing economic reforms. The economic burden of these decisions has increased on the general public and the government has also had to face it at the political level.

How special is this facility of American help

The Exchange Stabilization Facility of the US Treasury Department is made available to a limited number of countries only. Under this, assistance can be given to any country through dollar, currency swap or other types of financial guarantees. Its purpose is to strengthen foreign exchange reserves and help keep the local currency stable. This facility is different from the permanent dollar swap agreements between the US Federal Reserve and some major central banks. For Pakistan, receiving such assistance can be considered as an important signal for its relations with America along with economic help.

Economic crisis has been averted earlier also with the help of IMF

Pakistan has already taken help from IMF during serious economic crisis. It had received a standby package of $3 billion in the year 2023, which helped in avoiding the risk of possible default. After this, Pakistan also got an extended fund facility of $7 billion. Apart from this, it also got a separate loan of $1.3 billion to increase its capacity to deal with climate change and natural disasters. However, despite this, Pakistan’s foreign exchange reserves are still largely dependent on financial assistance, deposits and loan rollovers from countries like China and Saudi Arabia.

Efforts to strengthen economic relations with America

This demand from Pakistan has come at a time when Islamabad is trying to further strengthen its economic and strategic relations with America. After efforts to mediate in the Iran-US conflict, Pakistan hopes that it can also get economic benefits from its diplomatic role. If America approves this facility of $10 billion, it can help Pakistan in reducing the pressure on its foreign exchange reserves. Besides, this will also be a big political message for him along with economic security.

Although, some signs of improvement have been seen in Pakistan’s economy, but for this the government has had to take difficult steps like increasing taxes, reducing government expenditure and limiting expenditure on many schemes. In such a situation, this financial assistance sought from America can prove to be very important for Pakistan in the future.