ISLAMABAD — Pakistan plans to seek an expansion of its currency swap arrangement with China when the existing facility comes up for renewal in 2027, Finance Minister Muhammad Aurangzeb said on Thursday.
According to Reuters, Pakistan currently has a 30 billion yuan currency swap line with China, which has been fully drawn. The government is considering seeking a larger facility as part of its efforts to support foreign-exchange reserves and meet external financing requirements.
The finance minister also said Pakistan expects a response from the United States within two months regarding a proposed $10 billion exchange stabilisation facility. Discussions are also continuing with US financial institutions regarding possible support for aircraft purchases and an oil-refinery upgrade programme.
Pakistan is simultaneously continuing discussions with international lenders. The government has said it currently does not see a need for additional IMF support, while an IMF mission is scheduled to review the country's existing $7 billion programme.
The developments come as higher international oil prices and continuing geopolitical tensions create additional pressure on countries that rely heavily on imported energy. Pakistan's finance minister said prolonged regional conflict could pose risks to the country's 4% annual growth target.
The government's broader economic strategy also includes maintaining macroeconomic stability, increasing investment and exports, continuing structural reforms and shifting from reliance on aid toward trade and investment. Finance Minister Aurangzeb outlined these priorities at the Leaders in Islamabad Business Summit on September 17.
Key Points
- Pakistan plans to seek a larger China currency swap facility when it is renewed in 2027.
- The existing 30 billion yuan facility has been fully drawn.
- Islamabad expects a US decision on a proposed $10 billion exchange stabilisation facility.
- Pakistan continues to work under its existing IMF programme.
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Higher oil prices remain a potential challenge for the country's external finances.
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