Pakistan has formally requested a $10 billion financial facility from the United States to strengthen its foreign exchange reserves amid mounting economic pressures. The appeal was made by Pakistan’s Finance Minister Muhammad Aurangzeb during a meeting with U.S. Treasury Secretary Scott Bessent in Washington on Tuesday, according to multiple individuals familiar with the discussions.

The proposed package, reportedly designed with a five-year repayment term, is part of Islamabad’s efforts to leverage its role as a mediator between the United States and Iran. Pakistan, alongside Qatar, has been instrumental in negotiating a ceasefire memorandum between the two nations. The country’s military chief, Field Marshal Asim Munir, who has cultivated a personal relationship with former U.S. President Donald Trump, is seen as a key figure in these diplomatic efforts.

Historically, Pakistan has rarely accessed direct support from the U.S. Treasury’s Exchange Stabilization Fund (ESF), a $219 billion fund used to provide emergency liquidity to stabilize foreign exchange markets. However, Bessent has shown an openness to utilizing the ESF to assist foreign allies facing dollar liquidity challenges through instruments such as swaps, guarantees, or direct dollar provision.

Earlier this year, the U.S. Treasury extended a $20 billion swap line to Argentina to ease market volatility prior to its midterm elections, a move that drew some criticism from U.S. lawmakers but was ultimately repaid after Argentina’s elections. Bessent also noted during congressional testimony that Gulf states, including the United Arab Emirates, and other Asian allies had sought similar swap arrangements to mitigate the economic fallout linked to tensions surrounding the conflict involving Iran.

Following the Tuesday meeting, Pakistan’s finance ministry stated that Aurangzeb had sought U.S. cooperation to enhance foreign exchange reserves and broaden market access, grounding such efforts in the country’s sovereign credit ratings. The U.S. Treasury confirmed Bessent’s support for Pakistan’s push toward greater economic self-reliance and praised the government’s commitment to creating conditions favorable for a successful return to international capital markets.

Pakistan’s current foreign exchange reserves stand near $18 billion, sufficient to cover approximately three months of import costs. Maintaining these reserves has relied heavily on rolling over debt from China and Saudi Arabia, which enables the country to meet import demands and comply with conditions under its International Monetary Fund (IMF) program. The requested $10 billion facility, if approved, would surpass the roughly $7 billion in IMF support currently being received by Pakistan.

Economic strains have intensified following disruptions caused by the ongoing conflict between the United States, Israel, and Iran. Tehran’s military actions have significantly impacted shipping traffic through the Strait of Hormuz, a critical passage for about 20% of global oil supplies. In response, Pakistan’s Prime Minister Shehbaz Sharif reported in April that the country’s weekly oil import bill had surged from $300 million pre-conflict to $800 million, further exacerbating fiscal challenges.