ptember on its request to the United States for an Exchange Stabilisation Facility, Finance Minister Muhammad Aurangzeb said on Wednesday. Speaking to the media in Islamabad, Aurangzeb said the request was currently with the US Treasury Department, and that progress was expected by September - if approved, it could provide a lifeline for the cash-strapped South Asian economy.
Aurangzeb also said work was under way to extend the maturity period of bilateral loans, with Pakistan seeking to take the repayment period to 10 years. He said "various options" were being considered to extend the maturity of the loans. The finance minister added that discussions were continuing with the US EXIM Bank and other institutions.
The facility, if agreed to, would bolster Pakistan's reserves, ease pressure on the rupee and reduce its reliance on multilateral financing, even as Islamabad undertakes tighter fiscal and monetary policies in line with its International Monetary Fund programme. Pakistan remains under a $7 billion International Monetary Fund discipline that has required politically unpopular tax increases, spending restraint and reforms.
Exchange stabilisation facilities are rare US Treasury backstops, usually routed via the Exchange Stabilisation Fund, that provide dollars, swaps or guarantees to support reserves and steady currencies. These facilities are different from the permanent standing dollar swap lines that the US Federal Reserve has with some major central banks and act as an international supply line of US dollars to underpin financial stability. State Bank of Pakistan said in January that reserves could return to near their 2021 record, reaching $20 billion by the end of 2026.