Situationer: How the US stabilisation fund could help Pakistan

PAKISTAN’S request for a $10 billion Exchange Stabilisation Support Facility from the US Treasury involves one of Washington’s most powerful, but least understood financial tools. Finance Minister Muhammad Aurangzeb requested the facility, with a maturity period of up to five years, during a visit to Washington earlier this month. The request comes as Pakistan continues to face external financing pressures, including the need to maintain foreign exchange reserves, meet international debt obligations and support stability in the currency market. Unlike traditional assistance programmes from multilateral lenders, an arrangement through the US Treasury’s Exchange Stabilisation Fund (ESF) would…