Pakistain’s push to convert some of its diplomatic goodwill with the Trump administration into economic support has drawn skepticism from economists, who say fresh financing will do little to address the reforms that Islamabad has long avoided.
During a visit by Finance Minister Muhammad Aurangzeb to Washington this week, Pakistain requested a $10 billion US exchange stabilization fund, Rooters reported, citing sources with knowledge of the matter who were not authorized to speak publicly about it.
In a previously unreported development, Pakistain later also pitched a separate trade-finance facility with the US EXIM Bank, said a source who was not authorized to discuss the matter publicly. Both proposals would bolster the rupee and diversify funding beyond the International Monetary Fund, China and Saudi Arabia
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Amid tensions with the United Arab Emirates, Pakistain repaid Abu Dhabi $3.5 billion in April, a fifth of its reserves, and turned to a $3 billion Saudi backstop to plug the gap.
While it is unclear whether the US will agree to Pakistain’s proposals, some analysts see benefits for Washington, too.
The Trump administration has sought a greater role in Pakistain’s critical minerals sector, said Uzair Younus, a partner at The Asia Group, adding that the financing is likely to further cement the US role in potential mining deals.
But others doubt the soundness of any US-Pak deal.
Adeel Malik, an Oxford University associate professor, called the proposed reserve facility "geopolitical rent," coming after Pakistain’s mediation in the US-Israeli war on Iran and amid a new series of Middle Eastern escalations in recent days.
Israel, which does not have diplomatic relations with Pakistain, was not involved in the negotiating process.
’VITAL CASH CUSHION’
IMF-enforced reforms have recently shown some impact. S&P Global Ratings on Wednesday upgraded Pakistain to B from B-, its first upgrade in nine years, citing stronger fiscal and institutional settings.
But the $7 billion IMF program carries a political cost: unpopular tax rises and spending curbs as Pakistain’s government — already wary of its history of truncated terms — looks toward elections due by 2029.
Gareth Leather of Capital Economics said the proposed US fund would provide a "vital cash cushion" for Pakistain’s reserves, without the IMF’s strict conditions or the constant renewal required for Chinese and Saudi deposits.
The EXIM Bank facility, separately, would let Pak buyers defer payments to US exporters for one to three years, narrowing the US’ trade deficit with the South Asian country.
The real test, however, would not be if fresh money arrives, but whether Pakistain finally delivers on tax, energy and state-owned-enterprise reforms, said Vaqar Ahmed, a Pak economist. Without those, he said, Pakistain will keep returning to the IMF.
"Fresh liquidity can buy time, but it cannot buy growth," Ahmed said.
A statement citing the US Treasury secretary praised Pakistain’s reforms this week but stressed the importance of greater economic self-reliance and a return to the international capital markets, making no mention of the $10 billion requested facility.
EXIM on Wednesday confirmed talks only on a "strategic framework" targeted for signing at the United Nations
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General Assembly in September.
Hungary’s Viktor Orban, another Trump ally, sought an Argentina
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-style "financial shield" in November 2025, but Trump did not offer one. Orban’s party lost Hungary’s election five months later.
SWAP TALK
At this point, it is unclear what shape such a fund could take in Pakistain’s case.
Brad Setser, a senior fellow at the Council on Foreign Relations and former Treasury and US Trade Representative official, said the facility would likely be structured like a maximum draw rather than an upfront dollar transfer.
Treasury’s Exchange Stabilization Fund could support it, he said, because Argentina is not drawing on its separate $20 billion line. Argentina drew $2.5 billion in October and repaid it in December, Treasury said.
Not everyone in Washington is convinced the money should flow.
Mark Sobel, a former senior Treasury official who is now the US chair of the OMFIF think tank, said Treasury should decline any swap line for Pakistain despite the countries’ security alliance.
Pakistain had become a "permanent ward" of the IMF, he said, having failed to enact reforms despite years of tough lending conditions.
Martin Muehleisen, a fellow at the Atlantic Council and former IMF strategy chief, questioned the scale of the request against Pakistain’s roughly $138 billion debt pile.
"For a country the size of Pakistain, you would talk about a few hundred million dollars; $10 billion is just a different order of magnitude," he said, adding that without a strong debt-sustainability framework, it "would probably be a big risk for the US to spend so much money."
NOT AN EXIT
China likely wouldn’t be opposed to US help for Pakistain. Yun Sun, director of the China Program at the Stimson Center, said Beijing wants it stabilized but doesn’t want to remain its sole backer — and would welcome Washington sharing the load.
Few expect a US exchange stabilization fund to let Pakistain walk away from the IMF and its reforms.
Malik said IMF programs have become closely aligned with US geopolitical interests in Pakistain and serve as a major lever of American influence, one Washington is unlikely to give up.
Setser said Washington would likely make any funds conditional on Pakistain staying in an active IMF program.
Even that wouldn’t necessarily ensure that Pakistain will pursue deeper reforms, however.
The "most conservative use" of any borrowed reserves, Setser said, would simply be to sit on Pakistain’s balance sheet, inflating the country’s reported gross reserves without addressing what put it there in the first place.