Pakistan Requests $10 Billion US Stabilization Fund Following Iran Mediation

Islamabad has requested a $10 billion financial backstop from the United States Treasury, seeking to convert its recent diplomatic mediation in the Iran war into immediate economic relief for its fragile economy.

According to a source who spoke to Reuters, the proposal outlines a five-year Bilateral Exchange Stabilization Support Facility intended to shore up Pakistan's depleted foreign currency reserves, cushion the rupee, and lessen dependence on strict multilateral lending programs.

Geopolitical Leverage

The formal request was submitted to U.S. Treasury Secretary Scott Bessent following discussions in Washington with Pakistani Finance Minister Muhammad Aurangzeb.

While official communications from Islamabad avoided explicit reference to the $10 billion solicitation, the Pakistani finance ministry acknowledged that meetings addressed the vulnerability of the national economy to regional fallout.

According to the official ministry release, "Senator Aurangzeb sought greater U.S. support for Pakistan’s road to market, underpinned by improved access to international capital markets, higher foreign exchange reserves, and enhanced sovereign credit ratings," as both parties reaffirmed commitments to strategic cooperation.

Fiscal Strain

Pakistan remains bound by a $7 billion International Monetary Fund Extended Fund Facility, which mandates politically sensitive tax increases and rigid expenditure caps.

Despite securing a $3 billion standby arrangement in 2023 alongside supplementary climate resilience funding, the South Asian nation remains heavily dependent on bilateral debt rollovers and liquidity injections from Beijing and Riyadh.

This systemic exposure became clear in April when Islamabad returned approximately $3.5 billion, roughly one-fifth of its total reserves, to the United Arab Emirates, requiring an immediate $3 billion deposit from Saudi Arabia to prevent liquidity shortfalls.

Rare Financial Mechanisms

U.S. Exchange Stabilization Facilities represent rare bilateral interventions, with Argentina’s 2025 mechanism marking the only new foreign deployment since 2002 outside of longstanding swap arrangements with Mexico.

If granted, the facility would provide Islamabad with both crucial liquidity and political leverage as it expands commercial alignment with Washington.

Recent bilateral initiatives already include a stablecoin agreement with a crypto firm affiliated with the Trump family, plans to redevelop New York's Roosevelt Hotel, and $1.25 billion in U.S. Export-Import Bank financing for the Reko Diq mining project.