Pakistan expects progress by September on its request to the United States for an Exchange Stabilisation Facility, Finance Minister Muhammad Aurangzeb has said (Geo News).
The request is with the US Treasury Department, he told reporters in Islamabad. Reuters has reported the sum sought is $10 billion — which, if approved, would be a significant support for the external account.
An Exchange Stabilisation Facility is a bilateral arrangement drawing on the US Treasury’s own fund, not an IMF programme, and it is used sparingly. Securing one would be unusual and would rest on political rather than purely financial grounds.
Which is the context Aurangzeb did not spell out. The request follows Pakistan’s role brokering talks over the US-Iran war, which raised its diplomatic standing and prompted expectations that it might convert that into economic terms. Islamabad has also been increasing US imports — Cnergyico’s crude purchases alone account for about 80 per cent of the rise in Pakistan’s payments for US imports last fiscal year — partly to narrow its trade surplus and improve its case for tariff relief.
Separately, Aurangzeb said work was under way to extend the maturity of bilateral loans, with Pakistan seeking to push repayment periods out to 10 years, and that “various options” were under consideration. Discussions continue with the US EXIM Bank and other institutions. Pakistan has pitched an EXIM facility allowing local buyers to defer payments to US exporters for up to three years.
The government has been citing a fiscal deficit of 2.6 per cent of GDP, the lowest since FY03, and a record primary surplus of 2.9 per cent — figures underwritten substantially by the petroleum levy now driving four days of sit-ins.
