Pakistan seeks $10bn facility from US

Finance Minister Muhammad Aurangzeb has officially requested a $10 billion Exchange Stabilisation Support Facility (ESF) from the United States, aiming to bolster foreign exchange stability and bolster Pakistan's standing in international capital markets. The ministry disclosed these details to Business Recorder, noting that the request is part of ongoing negotiations with the US, though no final decisions have been made.

Aurangzeb also mentioned that Pakistan is exploring options to exit some existing financing arrangements and is seeking feedback on these plans by the end of September from entities such as Exim Bank or the US Treasury.

The government's strategy is to increasingly rely on market-based financing, moving away from frequent short-term bilateral rollovers. Aurangzeb emphasized that the $10 billion ESF is not meant to provide conventional loans or credits but rather serves as a market signal for Pakistan's currency and foreign exchange stability, potentially enabling access to international capital markets with longer-term maturities of five, seven, or even ten years.

Currently, Pakistan is working on improving its sovereign credit rating, with the goal of reaching at least a B+ rating, a significant shift from its historical rating stuck since 2003-04. The finance minister highlighted that this strategy includes engaging with international credit rating agencies to facilitate Pakistan's transition to longer-term debt instruments.