Pakistan’s formal request to the United States for a $10 billion Exchange Stabilization Support Facility has brought into focus the country’s continued dependence on external financing to sustain its economy and foreign exchange reserves. While the request itself is unprecedented in the context of U.S.-Pakistan financial relations, it comes at a time when Islamabad continues to receive billions of dollars in support from China, the International Monetary Fund (IMF), the World Bank and key Gulf partners.
Pakistan has sought a five-year U.S. Treasury-backed facility that would strengthen its foreign exchange reserves and provide an additional financial cushion while the country continues implementing IMF-backed economic reforms. The significance of the request lies less in its value than in the nature of the instrument. The United States has used exchange stabilization facilities only sparingly, with recent precedents limited to Uruguay in 2002 and Argentina in 2025, apart from the long-standing arrangement with Mexico. Pakistan has never publicly been associated with such a facility.
For years, Pakistan’s primary bilateral financial backstop has been China. Rather than extending periodic bailout packages, Beijing has supported Islamabad through a combination of foreign exchange deposits, commercial lending and repeated rollovers of maturing debt.
China’s State Administration of Foreign Exchange (SAFE) currently maintains around $4 billion in foreign exchange deposits with the State Bank of Pakistan. The deposits have been repeatedly rolled over, helping Islamabad maintain its foreign exchange reserves and meet IMF programme targets. Chinese commercial banks also recently rolled over loans worth $3.4 billion, enabling Pakistan to meet IMF reserve targets without immediate repayment obligations. Along with Saudi Arabia and the United Arab Emirates, China continues to renew bilateral financing arrangements that form a critical component of Pakistan’s annual external financing plan.
The IMF remains Pakistan’s principal multilateral stabilisation lender. Since 2023, it has approved a $3.25 billion Stand-By Arrangement, followed by a $7 billion Extended Fund Facility in 2024 and a $1.3 billion Resilience and Sustainability Facility. Together, these programmes represent commitments exceeding $11.5 billion, although disbursements are released in phases following periodic programme reviews and compliance with fiscal and structural reform conditions. Pakistan has been one of the IMF’s most frequent borrowers, entering more than twenty lending arrangements since becoming a member of the Fund.
The World Bank performs a different function in Pakistan’s financing ecosystem. Unlike the IMF, it does not provide emergency balance-of-payments assistance or replenish foreign exchange reserves. Instead, it finances long-term development. Earlier this year, the Bank approved a 10-year Country Partnership Framework worth up to $20 billion, under which individual loans will be sanctioned over the next decade for projects in energy, infrastructure, education, climate resilience, governance and social protection. Pakistan’s existing World Bank exposure already exceeds $23 billion, accumulated through concessional lending from the International Development Association (IDA) and loans from the International Bank for Reconstruction and Development (IBRD) over several decades.
Saudi Arabia and the United Arab Emirates constitute another important pillar of Pakistan’s financing structure. Both countries have repeatedly rolled over deposits and bilateral loans, while IMF programme documents identify continued financing assurances from Beijing, Riyadh and Abu Dhabi as essential for the implementation of Pakistan’s ongoing economic reform programme.
Taken together, these financing arrangements illustrate that Pakistan’s economic stabilisation continues to rely heavily on external official support. Chinese rollovers prevent immediate repayment pressures, IMF programmes provide conditional balance-of-payments financing, the World Bank finances long-term development projects, while Gulf partners continue extending deposits and bilateral support that strengthen the country’s external financing position.
Against this backdrop, Islamabad’s request to Washington assumes greater significance. Unlike development lending or IMF programme financing, the proposed U.S. facility would function as a sovereign foreign exchange backstop designed specifically to strengthen Pakistan’s reserves and reassure financial markets during periods of external stress. It would also represent the first known instance in recent decades of Pakistan seeking such a facility from the U.S. Treasury.
Strategic affairs experts said the request carries geopolitical significance because a U.S. Treasury-backed reserve facility would give Washington a larger role in Pakistan’s financial stabilisation adding Washington to a group of external partners that already includes China, the IMF, the World Bank, Saudi Arabia and the United Arab Emirates.
