Virendra Pandit
New Delhi: Broke Pakistan does what it can do best: beg or blackmail. It tries to encash everything, everywhere, by whichever means available.
This time, Islamabad has targeted Washington, seeking USD 10 billion in return for facilitating the US-Iran ‘peace agreement’, or MoU, which, in any case, is now in tatters with both the rivals and their allies fighting it out daily.
According to media reports on Wednesday, Pakistan has urged the United States for a USD10 billion “exchange stabilization facility,” which, if approved, could provide a lifeline to the nearly-bankrupt South Asian country surviving on doles from whoever would take mercy on it—despite its thanklessness.
Islamabad’s request follows Pakistan’s role in ‘brokering’ the US’ talks over the Iran war, which raised its diplomatic profile and stirred hopes that it could seek economic gains from Washington and other partners.
So, Pakistan has requested US Treasury Secretary Scott Bessent seeking a “Bilateral Exchange Stabilization Support Facility” between the two frenemies, worth USD 10 billion with maturity of up to five years.
As Pakistan has failed multiple times to repay its ‘contributors’ (debtors) like China and Saudi Arabia—the UAE was repaid its due only after it set a deadline a few months ago!—the US is may not accede to Islamabad’s request, particularly as the Iran deal yielded little.
The facility, if agreed to, would bolster Pakistan’s reserves, ease pressure on the Pakistani rupee and reduce its reliance on multilateral financing, even as Islamabad undertakes tighter fiscal and monetary policies in line with its ongoing 23rd International Monetary Fund (IMF) rescue program.
Predictably, the US Treasury declined to comment on the reported request, the media reported. Pakistan’s finance ministry also did not immediately respond.
Pakistani Finance Minister Muhammad Aurangzeb met with Bessant in Washington on Tuesday and said he had raised the vulnerability of the country’s economy to regional geopolitical developments, the ministry said in a statement that did not mention the request.
“Senator Aurangzeb sought greater US support for Pakistan’s road to market, underpinned by improved access to international capital markets, higher foreign exchange reserves, and enhanced sovereign credit ratings,” it said, adding that both sides reaffirmed their commitment to deepening bilateral economic cooperation, promoting greater US investment, and advancing strategic projects.
Currently, Islamabad remains under a strict USD 7 billion IMF discipline that has required politically unpopular tax increases, spending restraint and reforms.
Exchange stabilization facilities are rare US Treasury backstops, usually routed via the Exchange Stabilization Fund, that provide dollars, swaps or guarantees to support reserves and stable currencies.
These facilities are different from the permanent standing dollar swap lines that the US Federal Reserve has with some major central banks and act as an international supply line of US dollars to underpin financial stability.
A 2025 Argentina package was the first new foreign-government exchange stabilization facility operation since Uruguay in 2002, aside from Mexico’s long-standing swap line, dating to the 1940s and now sized at USD 9 billion.
Pakistan narrowly avoided default in 2023 with a USD 3 billion IMF standby deal and later secured a USD 7 billion Extended Fund Facility, along with a separate USD 1.3 billion loan to build up its resilience to climate change and natural disasters. But its reserves still depend on official financing, rollovers and deposits from China and Saudi Arabia.
That leaves Islamabad exposed to shifts in bilateral support and IMF disbursement delays. That vulnerability was exposed in April when Pakistan repaid about USD 3.5 billion, one-fifth of its reserves, to the United Arab Emirates with Saudi Arabia providing USD 3 billion in fresh support.
Pakistan’s central bank said in January 2026 that reserves could return to near their 2021 record, reaching USD 20 billion by the end of 2026.
Re-friending the US
A US exchange stabilization facility would carry weight as both a liquidity backstop and political signal, easing pressure on reserves and the Pakistani rupee, while reducing the South Asian country’s dependence on IMF tranches and ad hoc rescues.
The IMF-backed reforms have stabilized the economy at a political cost, including higher taxes, spending restraint and limited room for development or welfare spending.
Ratings agency Fitch said in April that Pakistan’s adherence to its IMF program has supported the country’s funding capacity, while rebuilt foreign exchange buffers provide a cushion against economic shocks from the ongoing conflict in West Asia between Pakistan’s own ‘friends.’
But deeper constraints remain. Fitch cautioned that rising energy costs and potential supply disruptions could sharply erode the country’s foreign exchange reserves.
Foreign investment in Pakistan has remained thin, deterred by recurring external crises, policy uncertainty, security risks, past profit-repatriation curbs and a narrow export base, while the country’s credit rating remains deep in speculative-grade territory, keeping borrowing costs high and market access limited.
Pakistan has sought to use its reloaded ties to the Trump administration to address some of these issues, with economic cooperation that has so far spanned crypto, real estate and mining.
Islamabad has signed a stablecoin agreement for cross-border payments with an affiliate of World Liberty Financial, the main crypto business of President Donald Trump’s family. It has also pursued a memorandum of understanding to redevelop the closed Pakistan International Airlines-owned Roosevelt Hotel in New York with the US government, and courted US mining investment, including in Reko Diq, where the US Export-Import Bank has announced USD 1.25 billion in financing.
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