Pakistan requests $10-billion US Exchange Stabilization Fund support

Pakistan has reportedly requested a $10-billion support facility from the US Exchange Stabilization Fund (ESF) through a Bilateral Exchange Stabilization Support Facility. Analysis by the Committee for the Cancellation of the Third World Debt (CADTM) suggests that while the facility provides technical liquidity, it may serve as geopolitical leverage for the United States in future negotiations regarding trade, China policy, and regional strategy.

While such support could reassure credit-rating agencies and investors, critics argue it may fail to address Pakistan’s underlying structural economic issues. The request follows significant financial movements, including the repayment of $3.5 billion in deposits to the UAE and a $3-billion deposit commitment from Saudi Arabia to bolster foreign exchange reserves. Additionally, reports indicate the Pakistani government is in discussions with Saudi Arabia for a $6.7-billion oil facility spanning fifteen years.