Treasury's Bessent welcomes Pakistan's reforms, push to return to capital markets

US Treasury Secretary Scott Bessent met Pakistan's finance minister, Muhammad Aurangzeb, on Tuesday and welcomed the country's ​progress in implementing economic reforms and laying the groundwork for ‌a return to international capital markets, Treasury said in a statement on Wednesday.

The statement did not address Pakistan's request for a $10 billion exchange stabilisation facility, first reported by ​Reuters.

But Treasury said Bessent emphasized the importance of Pakistan's work ​to continue its reforms, become more economically self-reliant, boost growth ⁠and strengthen its economic resilience.

"Secretary Bessent welcomed the progress Pakistan has ​made in restoring macroeconomic stability and advancing fiscal consolidation, recognising the government's ​efforts to implement significant economic reforms," Treasury said.

"Secretary Bessent expressed support for Pakistan's efforts to build greater economic self-reliance and commended the government's commitment to creating the ​conditions for a successful return to international capital markets," it said.

A ​U.S. official on Wednesday confirmed that Pakistan had requested a $10 billion currency swapline during ‌the ⁠meeting with Bessent, which if approved, could provide a lifeline for the cash-strapped South Asian economy.

Pakistan has been hit hard by the Iran war, given its dependence on Gulf energy imports, remittances and financing support ​from the region.

Pakistan ​narrowly avoided default ⁠in 2023 with a $3 billion IMF standby deal and later secured a $7 billion Extended Fund Facility, along with ​a separate $1.3 billion loan to build up its resilience ​to ⁠climate change and natural disasters.

But its reserves still depend on official financing, rollovers and deposits from China and Saudi Arabia.

Islamabad's request for the bilateral ⁠currency ​stabilization fund comes after it stepped up ​to broker talks on ending the Iran war, which helped raise its diplomatic profile and ​earned praise from the Trump administration.

-Reuters