Overview
- Multiple outlets reported on Tuesday that Pakistan has formally requested a $10 billion Bilateral Exchange Stabilisation Support Facility from U.S. Treasury Secretary Scott Bessent with up to a five-year maturity.
- An exchange stabilization facility is a rare U.S. Treasury tool routed through the Exchange Stabilization Fund that can supply dollars, swaps, or guarantees to protect a country’s currency and reserves.
- Pakistan seeks the facility to shore up foreign exchange reserves, ease pressure on the rupee, and cut its dependence on IMF tranches and ad hoc bilateral deposits from partners such as Saudi Arabia and China.
- The request comes after Pakistan’s near-default in 2023, its ongoing $7 billion IMF programme with politically costly reforms, and recent reserve stress that included a $3.5 billion repayment to the UAE in April.
- Neither Islamabad nor Washington has publicly confirmed approval, and markets will look for a formal U.S. response and details on the size, tenor, and mechanics of any deal as the next steps.