After Iran Crisis, Pakistan Turns To US With $10 Billion Financial Support Request

Islamabad: Amidst the increasing tension between Iran and America, Pakistan has demanded currency support facility of 10 billion dollars from America. According to media reports, Pakistan says that this economic cooperation will strengthen its foreign exchange reserves and provide relief to its economy which is struggling with economic challenges.

Why does Pakistan want 10 billion dollars in help?

According to Reuters report, Pakistan has requested the US administration to start Bilateral Exchange Stabilisation Support Facility. The proposed arrangement will be for a maximum of five years and is aimed at keeping the Pakistani rupee stable as well as strengthening foreign exchange reserves.

What will be the benefit of this assistance?

If America approves this proposal, Pakistan's foreign exchange reserves may improve. This will reduce the pressure on the Pakistani rupee and may also reduce the country's dependence on emergency economic assistance from international financial institutions.

Are Economic reforms continuing under IMF programme?

Currently, Pakistan is implementing economic reforms under the 7 billion dollars program of the International Monetary Fund (IMF). Under this, the government has had to take many steps related to increasing taxes, cutting government expenditure and financial discipline.

Earlier in the year 2023, Pakistan had saved itself from a possible default by obtaining a standby package of 3 billion dollars from the IMF. It later also received a 7 billion dollars Extended Fund Facility (EFF) and an additional 1.3 dollars  billion for climate-related projects.

Efforts to strengthen relations with America?

Experts believe that along with economic stability, Pakistan also wants to strengthen its economic and strategic relations with America. If this assistance is received, it can provide relief to Pakistan from the foreign exchange crisis as well as increase the confidence of international investors.

However, no official response has come yet from the US administration on this demand. Everyone will be keeping an eye on the decision on this proposal in the coming days.