Pakistan has formally sought a US Exchange Stabilisation Support Facility as the government looks to strengthen the rupee and foreign exchange and reduce its reliance on loan rollovers, Finance Minister Muhammad Aurangzeb said Wednesday.
The minister confirmed that negotiations with the United States are ongoing and said Pakistan expects to receive a response or views from the US Treasury or US Exim Bank by the end of September. The request, reported to be for $10 billion, is intended primarily as a signal of confidence in Pakistan’s currency and foreign exchange stability rather than a conventional loan.
The finance minister said such a signal could help Pakistan regain broader access to international capital markets. The government has already appointed three arrangers as it prepares to raise financing through longer-term market-based instruments.
Pakistan is seeking to shift toward maturities of five, seven and 10 years, reducing its dependence on repeated bilateral rollovers. Aurangzeb said the government was also discussing ways to extend the maturity of existing bilateral loans to as long as 10 years.
The government is holding discussions with the US Exim Bank and other institutions as part of the financing strategy. Aurangzeb said Pakistan remained grateful to bilateral partners for their support but was now recalibrating its financing approach toward market-based borrowing.
He also said the government was working with international credit rating agencies to improve Pakistan’s sovereign rating, with a target of moving toward a B+ rating. A stronger rating, he said, would improve the country’s ability to raise financing from international markets at longer maturities.
Aurangzeb said Pakistan had already begun rebuilding access to international debt markets through instruments including a Eurobond, an Islamic Sukuk and a dollar-settled rupee-linked bond.
The proposed US facility would therefore serve as a confidence backstop for Pakistan’s foreign exchange position rather than simply adding another source of debt. If approved, it could strengthen market confidence, support the rupee and improve Pakistan’s ability to access longer-term international financing.
Pakistan remains under a $7 billion International Monetary Fund program that requires fiscal and structural reforms. The country has also relied heavily on official financing, bilateral rollovers and deposits from partners to support its foreign exchange reserves in recent years.
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