(Digital Itla) Pakistan has requested a $10 billion backstop facility from the United States. If approved, this request could significantly bolster Pakistan's foreign exchange reserves.
According to details, global news agency Reuters claims that Pakistan has requested a $10 billion "backstop facility" from the US to increase its foreign exchange reserves and ensure economic stability. The request was sent to US Treasury Secretary Scott Bessent under the "Exchange Stabilization Facility," seeking financial assistance for a period of five years.
Reuters stated that Pakistan has urged the US Department of the Treasury to grant these funds over a 5-year duration. Approval of this request would provide substantial support to Pakistan's reserves, ease pressure on the rupee, and help stabilize the country's external finances. The step also aims to strengthen Pakistan's access to international capital markets.
On the other hand, US officials in Washington declined to comment on the Reuters report or Pakistan’s alleged request, while Ministry of Finance officials in Islamabad have so far neither officially confirmed nor denied the request.
Reuters further noted in its report that Pakistan is currently under a $7 billion IMF program, which required the government to raise taxes, cut public spending, and implement several economic reforms. Pakistan avoided default in 2023 through a $3 billion IMF program, while also securing an additional $1.3 billion in climate resiliency financing.
The report added that Pakistan's foreign exchange reserves still rely heavily on financial support from friendly nations. In April, Pakistan repaid approximately $3.5 billion to the UAE, while Saudi Arabia provided $3 billion in new financial support.
According to Fitch Ratings, implementation of the IMF program has improved Pakistan's financial standing; however, ongoing tensions in the Middle East, rising energy prices, and potential supply chain disruptions pose key risks to the economy.
Reuters also highlighted that Pakistan has sought to strengthen economic ties with the US in recent years, leading to progress in cryptocurrency, minerals, and other sectors. Pakistan has attempted to increase US investment interest, particularly in the Reko Diq project, for which the US Ex-Im Bank has already announced $1.25 billion in financing.
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