Pakistan to Seek Bigger China Swap Line, Awaits US Financing Decision

Pakistan will push for an expansion of its 30 billion yuan currency swap line with China when the arrangement comes up for renewal in 2027, Finance Minister Muhammad Aurangzeb has said, while indicating that Washington is expected to respond within two months to a request for a $10 billion exchange stabilisation facility.

Speaking after meetings with his Chinese counterpart and the governor of China's central bank, Aurangzeb said the existing swap line had been fully drawn. He said the government had not yet settled on the size of the additional financing it would seek, but that a formal request would be submitted at the time of renewal. Chinese officials were open to the idea, he added, though a process would have to be followed.

Pakistan depends on external financing to shore up foreign exchange reserves and service debt repayments, making support from China, Gulf states and multilateral lenders central to its economic stability and to investor confidence.

On the US side, Aurangzeb said he expected an answer within two months on the proposed exchange stabilisation facility. Talks are also under way with the Export-Import Bank of the United States and the US International Development Finance Corporation. EXIM financing could back aircraft purchases from Boeing by Pakistan International Airlines following the carrier's privatisation, while DFC support could help fund a planned $5 billion programme to upgrade the country's oil refineries. The US Treasury, DFC and EXIM did not immediately respond to requests for comment.

Asked whether pursuing support from both Washington and Beijing posed difficulties, Aurangzeb described the approach as an "and-and" discussion. He called China a long-standing strategic partner and said relations with the Trump administration were marked by good understanding at the leadership level, adding that Pakistan was fortunate to have ties with both major economies.

On energy, Aurangzeb said Pakistan had coped relatively well with the initial spike in crude prices after US and Israeli strikes on Iran, but warned that the outlook had grown more uncertain. Should the conflict that began in February run into November or December, he said, it would become a concern and could put the government's 4% growth target for the fiscal year at risk. The country holds sufficient oil stocks through September and is well placed for October, with an institutional mechanism reviewing the situation daily and planning for November supplies already under way.

Aurangzeb said the government had no plans to seek additional IMF financing or emergency support from the Washington-based lender, describing the position as manageable for now. An IMF mission is due next week for the fourth review of Pakistan's $7 billion programme and the third review of its Resilience and Sustainability Facility. He said Pakistan was in good standing on the quantitative benchmarks and largely compliant with the structural ones.