Pakistan eyes bigger China swap line, expects US financing decision soon

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Finance Minister Muhammad Aurangzeb speaks during a Reuters interview, with a portrait of Quaid-i-Azam Mohammad Ali Jinnah in the background, in Islamabad, Pakistan, on June 15, 2026. — Reuters/File
Finance Minister Muhammad Aurangzeb speaks during a Reuters interview, with a portrait of Quaid-i-Azam Mohammad Ali Jinnah in the background, in Islamabad, Pakistan, on June 15, 2026. — Reuters/File

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, adding he expects a US response on a proposed $10bn exchange stabilisation ​facility within two months.

The country remains reliant on external financing to bolster foreign exchange reserves and meet debt repayments, ‌making support from China, Gulf states and multilateral lenders key to maintaining economic stability and investor confidence.

Aurangzeb said the entire 30bn yuan swap line from China had been fully drawn, adding that the government had yet to decide how much additional financing it would seek when the facility ​comes up for renewal.

“They were open to it, but there is a process which has to be followed,” said ​Aurangzeb, referring to recent meetings with his Chinese counterpart and the country’s central bank governor.

“We do ⁠plan to make a formal request at the time of the renewal.”

Meanwhile, Aurangzeb said he expected a response within two months ​to Pakistan’s request for a $10bn exchange stabilisation facility from Washington, adding that the government was also in talks with the Export-Import ​Bank of the United States (EXIM) and the US International Development Finance Corporation (DFC).

EXIM financing could support aircraft purchases from Boeing by Pakistan International Airlines now that the national carrier is privatised, while DFC could help fund a planned $5bn programme to upgrade the country’s oil refineries.

Asked whether there were any ​concerns about simultaneously seeking additional support from the US and China, Aurangzeb said it was an “and-and” discussion.

“China has been a long-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 fortunate to have this kind of relationship with both important economic and superpowers.”

The US Treasury, DFC and EXIM did not immediately reply to a request for comment.

Asked about elevated crude oil prices following the latest Middle East conflict, which began in February, Aurangzeb said Pakistan had navigated the initial price spike after US and Israeli strikes on Iran relatively well, but cautioned that the outlook had ​become more uncertain.

“If this conflict ​goes into, unfortunately, November or ⁠December, you know, this is something which will be an area of concern for us,” he said, adding prolonged disruption could put at risk the government’s 4pc growth target for the fiscal ​year.

Pakistan had secured sufficient oil stocks to cover its needs through September and was well positioned ​for October, he ⁠said, adding an institutionalised mechanism was now reviewing the situation on a daily basis. Planning for November supplies was already under way.

Nonetheless, Aurangzeb said the government had no plans to seek additional International Monetary Fund (IMF) financing or emergency support from the Washington-based lender.

“As of now, our considered ⁠view is ​that it’s manageable.”

An IMF mission is due next week for the fourth ​review of Pakistan’s $7bn programme and the third review of its Resilience and Sustainability Facility.

“From our perspective, we are in good stead with the quantitative benchmarks, and ​we are largely compliant with the structural benchmarks,” he said.

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