Pakistan expects US reply soon on $10bn stabilization facility: Bloomberg

Pakistan expects a response from Washington within the next couple of months on its request for a $10 billion stabilization facility, Bloomberg News reported on Tuesday, as Islamabad seeks to capitalize on improved ties with the Trump administration.

Pakistan’s engagement with the United States on the proposed facility has been “constructive,” Khurram Schehzad, an adviser to the finance minister, told Bloomberg.

“The proposed US stabilization facility would also serve as a potential backstop and confidence signal, supporting market access and helping crowd in private capital,” Schehzad was quoted as saying.

Pakistan had formally sought a $10 billion Exchange Stabilisation Support Facility from the United States, Finance Minister Muhammad Aurangzeb confirmed last week, saying the proposed arrangement was intended to signal currency and foreign exchange stability rather than serve as a conventional loan or credit line. Negotiations were ongoing, although nothing had been finalized, he said.

Aurangzeb had said Islamabad hoped to receive views from either the US Treasury or the Export-Import Bank by the end of September as part of its broader effort to move away from repeated bilateral rollovers towards market-based financing. The government aims to improve Pakistan’s sovereign rating and eventually raise longer-term funds from international markets with maturities of five, seven or 10 years.

Pakistan has developed closer ties with the US during President Donald Trump’s second term, particularly as it emerged as a key mediator in the US-Iran war.

Prime Minister Shehbaz Sharif and army chief Asim Munir have played prominent roles in diplomacy surrounding the Middle East conflict.

Islamabad is now seeking to build on that relationship to strengthen an economy that came close to default in 2023.

The development comes as Pakistan’s economic outlook shows signs of improvement. The country has taken a series of steps to stabilize its finances, including securing a $7 billion three-year bailout from the International Monetary Fund and loans from allies.

Earlier this week, Moody’s Ratings upgraded Pakistan’s sovereign credit rating, citing a stronger external position, better fiscal metrics and lower domestic financing costs. The country also returned to global debt markets this year after a four-year absence, raising funds through a eurobond and issuing its first yuan-denominated notes in China.