Key facts
- Pakistan will seek to expand its 30 billion yuan currency swap line with China when it expires in 2027.
- Finance Minister Muhammad Aurangzeb expects a U.S. response within two months on a proposed $10 billion exchange stabilization facility.
- Pakistan is in talks with the U.S. Export-Import Bank and the U.S. International Development Finance Corporation.
- The Pakistani finance minister stated that the country has navigated the initial crude oil price spike relatively well but cautioned about future uncertainty.
- Pakistan has sufficient oil stocks through September and is well-positioned for October.
- The government does not plan to seek additional IMF financing or emergency support.
Pakistan is seeking to bolster its foreign exchange reserves and meet debt obligations through external financing, with support from China, Gulf states, and multilateral lenders being crucial for economic stability. Finance Minister Muhammad Aurangzeb stated that the country will seek an expansion of its 30 billion yuan currency swap line with China when the facility expires in 2027. The entire current swap line has been drawn, and formal requests for additional financing will be made at the time of renewal.
Aurangzeb also indicated that a response to Pakistan's request for a $10 billion exchange stabilization facility from the U.S. is expected within two months. The government is also engaged in discussions with the U.S. Export-Import Bank (EXIM) and the U.S. International Development Finance Corporation (DFC). EXIM financing could support potential aircraft purchases by Pakistan International Airlines, while DFC might fund a planned $5 billion program to upgrade the country's oil refineries.
Regarding elevated crude oil prices due to the Middle East conflict, Aurangzeb noted that Pakistan has managed the initial price spike but expressed concern about prolonged disruption, which could jeopardize the government's 4% growth target for the fiscal year. The country has secured sufficient oil stocks through September and is well-positioned for October, with daily reviews of the situation underway. Aurangzeb confirmed that the government has no plans to seek additional IMF financing, viewing the current situation as manageable. An IMF mission is scheduled to arrive for the fourth review of Pakistan's $7 billion program and the third review of its Resilience and Sustainability Facility.