Pakistan’s efforts to leverage good diplomatic relations with US President Donald Trump’s administration for economic support have raised skepticism among economists, who say any new funding will do little to address reforms that Islamabad has long avoided implementing.
Reuters reported, citing informed sources who were not authorized to speak publicly about the matter, that during the visit of Pakistani Finance Minister Muhammad Aurangzeb to Washington this week, Pakistan requested the establishment of a US fund to stabilize the exchange rate worth $10 billion.
In a previously undisclosed development, a source not authorized to discuss the issue publicly said that Pakistan later also put forward a separate proposal to obtain trade financing facilities from the US Export-Import Bank. The two proposals would support the Pakistani rupee and diversify sources of financing away from the International Monetary Fund, China and Saudi Arabia.
Pakistan this year helped broker a ceasefire between the United States and Iran, but the country’s economic fundamentals remain largely unchanged compared to what they were before the outbreak of war.
In light of the tension with the UAE, in April, Pakistan paid three and a half billion dollars to Abu Dhabi, which is equivalent to a fifth of its foreign reserves, and resorted to a Saudi support umbrella worth three billion dollars to fill the gap.
While it is still unclear whether the United States will agree to Pakistani proposals, some analysts believe that Washington may reap benefits from any potential agreement.
Ozair Yunus, Partner at Asia Group, said that the Trump administration seeks to strengthen its role in Pakistan’s vital minerals sector, adding that the potential financing is likely to solidify the American role in future mining deals.
But others questioned the feasibility of any US-Pakistani agreement.
Adeel Malik, associate professor at Oxford University, described the proposed facility to support reserves as a “geopolitical rent,” considering that it comes in the wake of Pakistan’s mediation in the American-Israeli war against Iran, and in light of a new wave of escalation in the Middle East during the past few days.
‘Vital cash reserve’
The reforms imposed by the International Monetary Fund are beginning to produce some results. Yesterday, Wednesday, Standard & Poor’s Global Credit Ratings Agency raised Pakistan’s sovereign rating to “B” from “B-“, in the country’s first upgrade in nine years, indicating improved financial and institutional conditions.
But the $7 billion IMF program carries a political cost, requiring unpopular tax increases and spending cuts at a time when the Pakistani government, concerned about its history of short-term governments, looks to elections scheduled for 2029.
Gareth Leather of Capital Economics said that the proposed US fund would provide an “important monetary safety net” for Pakistan’s reserves, without the strict conditions imposed by the International Monetary Fund or the need to constantly replenish Chinese and Saudi deposits.
On the other hand, the facilities proposed by the US Export-Import Bank will allow Pakistani buyers to postpone payment of their dues to US exporters for a period ranging between one and three years, which will contribute to reducing the US trade deficit with the South Asian country.
However, the real test does not lie in the arrival of new money, but rather in whether Pakistan will finally implement reforms related to taxes, the energy sector and state-owned companies, according to Pakistani economist Waqar Ahmed, who said that the country will continue to return to the International Monetary Fund unless these reforms are implemented.
He added, “New liquidity can buy time, but it cannot buy growth.”
A statement attributed to the US Treasury Secretary this week praised the reforms implemented by Pakistan, but stressed the importance of strengthening the Pakistani economy’s ability to become self-reliant and return to international capital markets, without any reference to the requested $10 billion facility.
The US Export-Import Bank confirmed on Wednesday that the talks are limited to a “strategic framework” aimed at being signed during the UN General Assembly meetings in September.
Hungarian Prime Minister Viktor Orban, another Trump ally, sought in November 2025 to obtain a “financial shield” similar to what Argentina obtained, but Trump did not provide him with such support, before Orban’s party lost the Hungarian elections five months later.
China will likely not oppose US assistance to Pakistan. Yun Sun, director of the China Program at the Stimson Research Center, said that Beijing wants stability in Islamabad but does not want to remain its sole supporter, and would welcome Washington’s participation in shouldering the burden.
Few expect the US exchange rate stabilization fund to allow Pakistan to withdraw from the IMF and its reforms.
Malik said that IMF programs have become closely aligned with US geopolitical interests in Pakistan, and constitute a key instrument of US influence, something Washington is unlikely to abandon.
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