Pakistan awaits US verdict on $10bn facility

September 17, 2026 (MLN): Pakistan will go back to Beijing for a larger currency swap line when its existing 30-billion-yuan facility comes up for renewal in 2027, Finance Minister Muhammad Aurangzeb said, in remarks that underline how central Chinese liquidity has become to the country's reserve-management strategy even as it courts a separate financing arrangement with the United States.

He told Reuters that the full yuan facility has already been drawn down, though the government has not yet settled on how much more it will request. Chinese officials and the central bank governor were receptive in recent meetings, he said, but any expansion will have to move through China's own approval process before Islamabad submits a formal request at renewal.

The swap line has functioned as a quiet but critical buffer for Pakistan's foreign exchange reserves, and a bigger facility would give the State Bank more room to manage external shocks without leaning as heavily on costlier market borrowing. For investors tracking reserve adequacy and the rupee's stability, the signal matters as much as the number: Beijing remains willing to keep the tap open.

On the US side, Muhammad Aurangzeb said he expects a response within two months on Pakistan's request for a $10 billion exchange stabilisation facility from Washington. Parallel talks are under way with the US Export-Import Bank, which could help finance Boeing aircraft purchases by a newly privatised Pakistan International Airlines, and with the US International Development Finance Corporation, a potential backer of a planned $5 billion refinery-upgrade programme.

Asked whether pursuing support from both Washington and Beijing simultaneously carried diplomatic risk, Muhammad Aurangzeb framed it as complementary rather than competing, describing it as an “and-and” discussion.

He pointed to what he called a strong working relationship with both governments at the leadership level, arguing Pakistan is positioned to draw on Chinese and American financing at once rather than having to pick a lane.

The minister also addressed the risk posed by elevated crude prices following the Middle East conflict that began in February. Pakistan absorbed the initial price shock after US and Israeli strikes on Iran reasonably well, he said, but the outlook has grown more uncertain. A conflict that drags into November or December would become a genuine concern, he added, with prolonged disruption capable of denting the government's 4% growth target for the fiscal year.

On supply, Muhammad Aurangzeb said Pakistan has secured enough oil stocks to cover consumption through September and is well positioned for October, with a dedicated mechanism now reviewing the situation daily and planning for November already under way  a level of contingency planning that speaks to how seriously Islamabad is treating the tail risk from the conflict.

Despite the financing push on multiple fronts, Muhammad Aurangzeb said the government has no plans to seek additional IMF funding or emergency support, calling the current position manageable.

An IMF mission arrives next week for the fourth review of Pakistan's $7 billion Extended Fund Facility programme and the third review of its Resilience and Sustainability Facility. The minister said Pakistan is in good stead on quantitative benchmarks and largely compliant on structural ones.

For Pakistan's capital markets, the through-line is a financing strategy built on diversification: a larger Chinese swap line to backstop reserves, a prospective US facility and export-credit support to fund strategic purchases, and continued IMF engagement to anchor macro credibility, all being pursued in parallel rather than sequence.

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