Pakistan is looking to the United States for a major financial backstop as it tries to strengthen the rupee and reduce its dependence on repeated loan rollovers.
Finance Minister Muhammad Aurangzeb said Wednesday that Pakistan has formally requested a US Exchange Stabilisation Support Facility.
The proposed facility is reportedly worth around $10 billion.
But the government says the goal is not simply to take on another large loan.
Instead, Pakistan wants the facility to send a strong signal that its currency and foreign exchange position are stable.
US response expected by September
Aurangzeb said talks with the United States are underway.
Pakistan expects feedback from the US Treasury or US Exim Bank by the end of September.
The finance minister believes such support could help restore investor confidence and give Pakistan better 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 wants longer-term borrowing
Pakistan is also trying to move away from short-term financing and repeated bilateral loan rollovers.
The government is targeting maturities of five, seven, and 10 years for future borrowing.
Officials are also discussing ways to extend the maturity of existing bilateral loans to as long as 10 years.
Aurangzeb said Pakistan remains thankful for the support provided by bilateral partners but is now trying to reshape its financing strategy around international markets.
Focus turns to credit rating
The government is also working with international credit rating agencies to improve Pakistan’s sovereign rating.
Aurangzeb said the target is to move toward a B+ rating.
A stronger rating could make it easier and cheaper for Pakistan to raise money from international investors, particularly through longer-term debt.
Pakistan has already started rebuilding its presence in global debt markets through instruments including a Eurobond, Islamic Sukuk, and a dollar-settled rupee-linked bond.
Why the US facility matters
If approved, the proposed US facility could work more like a confidence cushion for Pakistan’s foreign exchange position than a conventional source of fresh borrowing.
That could support the rupee, reassure investors, and help Pakistan secure longer-term financing.
The move comes as Pakistan continues its $7 billion IMF program, which requires fiscal and structural reforms.
The country has also depended heavily on official financing, bilateral rollovers, and deposits from partner countries to maintain its foreign exchange reserves.
Now, the government wants to gradually reduce that dependence and return to more sustainable market-based financing.
