Pakistan will seek an expansion of its 30 billion yuan swap line with China when the facility expires in 2027, Finance Minister Muhammad Aurangzeb said. He added that he expects a US response on a proposed $ exchange stabilisation facility within two months.
The country continues to depend on financing to strengthen foreign exchange reserves and cover debt repayments. This makes support from China, Gulf states and multilateral lenders essential for keeping stability and maintaining investor confidence.
Aurangzeb said the full 30 billion yuan swap line from China has already been fully drawn. He noted that the government has not yet decided how much additional financing it will ask for when the facility is renewed.
“They were open to it, but there is a process which has to be followed ” said Aurangzeb, referring to meetings with his Chinese counterpart and the central bank governor.
“We do plan to make a request at the time of the renewal.”
At the time, Aurangzeb said he expects a response within two months to Pakistan’s request for a $10bn exchange stabilisation facility from Washington. He added that the government is also in discussions with the Export-Import Bank of the United States (EXIM) and the US International Development Finance Corporation (DFC).
EXIM financing could help Pakistan International Airlines purchase aircraft from Boeing now that the national carrier is being privatised. Meanwhile, DFC funding might support a planned $ project to upgrade the country’s oil refineries.
When asked whether there are concerns about seeking support from both the US and China at the same time, Aurangzeb said it is an “and-and” discussion.
“China has been a standing strategic partner for us… and we have very good at the leadership level now understanding and relationship, with the Trump administration ” he said.
We are very lucky to have this kind of relationship with both economic powers and superpowers.
The US Treasury, DFC and EXIM did not immediately respond to a request for comment.
Asked about crude oil prices after the latest Middle East conflict, which started in February, Aurangzeb said Pakistan handled the initial price jump after US and Israeli attacks on Iran pretty well but warned that the situation had become more unclear.
“If this conflict goes into, unfortunately, November or December, you know this is something which will be a problem for us,” he said, adding that longer disruptions could threaten the government’s growth target for the fiscal year.
Pakistan has oil stocks to cover its needs until September and is ready for October, he said, adding that a system is now checking the situation every day. Planning for November supplies is already happening.
Still, Aurangzeb said the government does not plan to ask for money from the International Monetary Fund or emergency help from the lender based in Washington.
“As of now our considered view is that it’s manageable.”
An IMF team is coming this week for the fourth review of Pakistan’s $7bn program and the third review of its Resilience and Sustainability Facility.
“From our side, we are in shape with the quantitative targets, and we are mostly following the structural targets,” he said.
