Pakistan seeks $10 billion U.S. lifeline after Iran war mediation, prompting ‘brokerage fee’ talk

Pakistan has asked the United States for a $10 billion exchange stabilization facility to bolster its foreign-exchange reserves, according to sources briefed on the request, as Islamabad seeks an economic payoff after its mediation efforts in the U.S.-Iran war prompted talk of a possible “brokerage fee.”Reuters reported Thursday that Pakistani Finance Minister Muhammad Aurangzeb made the request during a meeting with U.S. Treasury Secretary Scott Bessent in Washington. Islamabad is seeking a Bilateral Exchange Stabilization Support Facility with a maturity of up to five years, according to the sources. If approved, the facility could help strengthen Pakistan’s foreign-exchange reserves and ease pressure on the rupee. It could also reduce Islamabad’s reliance on multilateral financing, although the proposal has not been approved and its terms remain subject to negotiations. Pakistan’s request comes after its diplomatic engagement in efforts related to the U.S.-Iran war, which has raised Islamabad’s profile as a potential intermediary while creating expectations that it could seek greater economic support from Washington. The conflict has also increased pressure on regional economies, with disruptions and threats affecting shipping through the Strait of Hormuz, a major route for global energy supplies. The wider tensions have raised concerns over energy prices, trade and financial stability across the region. Neither Washington nor Islamabad has publicly confirmed that the proposed facility will be approved. The U.S. Treasury did not comment on the request, while Pakistan’s Finance Ministry did not immediately respond to the report. Aurangzeb said he had raised the vulnerability of Pakistan’s economy to regional geopolitical developments during his meeting with Bessent. Pakistan’s Foreign Ministry said the two sides also discussed U.S. support for Pakistan’s return to international capital markets, stronger foreign-exchange reserves, improved sovereign credit ratings and deeper bilateral economic cooperation. Pakistan remains under a $7 billion International Monetary Fund program that requires fiscal reforms, including higher taxes and spending restraint. The country narrowly avoided sovereign default in 2023 after securing a $3 billion IMF standby arrangement and later obtained a $7 billion IMF Extended Fund Facility, along with an additional $1.3 billion loan aimed at strengthening resilience against climate change and natural disasters. Despite those programs, Pakistan continues to rely heavily on IMF disbursements, bilateral assistance and financial rollovers from partners including China and Saudi Arabia. Access to foreign exchange and external financing remains a central concern for the government. An exchange stabilization facility can support a country’s foreign-exchange reserves and currency stability through mechanisms such as dollar funding, swap arrangements or guarantees. The proposed U.S. facility would not necessarily represent a direct cash payment to Pakistan and has not been approved. The post Pakistan seeks $10 billion U.S. lifeline after Iran war mediation, prompting ‘brokerage fee’ talk appeared first on Khaama Press.