Pakistan plans to seek an expansion of its 30 billion yuan currency swap arrangement with China when the facility comes up for renewal in 2027, Finance Minister Muhammad Aurangzeb has said. The government is also awaiting a response from the United States on a proposed $10 billion exchange stabilisation facility, with Aurangzeb expecting a decision within two months. The developments come as Pakistan continues to rely on external financing to strengthen foreign exchange reserves and meet its debt obligations.
Aurangzeb said the existing 30 billion yuan swap line with China has been fully drawn. While the government has not yet determined the size of any additional facility it may request, the finance minister said Pakistan intends to formally seek an expansion when the current arrangement is renewed. He said Chinese authorities had indicated openness to the request, but a formal process would need to be followed before any increase could be agreed. The finance minister made the comments following recent engagements with his Chinese counterpart and the governor of China’s central bank.
At the same time, Pakistan is pursuing financial support from the United States through a proposed $10 billion exchange stabilisation facility. Aurangzeb said Islamabad expects to receive a response from Washington within two months. The proposed facility is part of the government’s efforts to strengthen its external financing position and support economic stability. The finance minister also said Pakistan is holding discussions with the United States Export-Import Bank and the US International Development Finance Corporation on potential financing for specific projects.
Potential financing from the US Export-Import Bank could support the purchase of Boeing aircraft by Pakistan International Airlines following the national carrier’s privatisation, according to Aurangzeb. Discussions with the US International Development Finance Corporation could also support a planned $5 billion programme for upgrading Pakistan’s oil refineries. These potential financing arrangements are separate from the proposed exchange stabilisation facility and form part of wider discussions between Pakistan and US financial institutions.
Aurangzeb said Pakistan does not view its efforts to secure additional support from China and the United States as mutually exclusive. He described the approach as an “and-and” discussion, highlighting China’s long-standing economic relationship with Pakistan alongside the country’s engagement with the US administration. Pakistan’s external financing requirements have made relationships with China, Gulf countries and multilateral lenders important for supporting foreign exchange reserves, debt repayments and broader economic stability.
The finance minister also discussed the impact of elevated crude oil prices and uncertainty linked to the ongoing conflict in the Middle East. He said Pakistan had managed the initial increase in oil prices relatively well but warned that a prolonged disruption could create greater economic pressure. According to Aurangzeb, if the conflict continues into November or December, it could become a significant concern for Pakistan and potentially put the government’s 4% economic growth target for the fiscal year at risk.
Pakistan has secured sufficient oil stocks to meet its requirements through September and is considered well positioned for October, according to the finance minister. He said an institutional mechanism is reviewing the country’s fuel situation on a daily basis, while preparations for November supplies have already started. The government’s monitoring of fuel availability comes as higher international crude prices and supply disruptions create additional pressure on countries dependent on imported energy.
Despite the financing discussions with China and the United States, Aurangzeb said the government does not currently plan to request additional financing or emergency support from the International Monetary Fund. Pakistan is scheduled for an IMF mission for the fourth review of its $7 billion programme as well as the third review of its Resilience and Sustainability Facility. Aurangzeb said the government’s assessment is that the situation remains manageable and that Pakistan is in a strong position regarding the programme’s quantitative benchmarks, while largely complying with its structural benchmarks.
The developments place external financing, foreign exchange liquidity and energy costs among the key factors shaping Pakistan’s economic outlook. The proposed expansion of the China swap arrangement, the expected US response on the exchange stabilisation facility and potential project financing from US institutions could influence the country’s external financing position if the respective processes move forward. For now, however, the government continues to assess its financing requirements while maintaining that additional IMF emergency support is not under consideration.
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