The Prime Minister’s Office has issued fresh instructions to finalize currency swap agreements with the European Union, Russia, and Iran, as part of a push to reduce Pakistan’s reliance on the US dollar and strengthen trade with regional economies.
According to a report by Express Tribune, the proposed agreements have been included in the Ministry of Finance’s strategic reforms agenda and are being monitored by the PM’s Delivery Unit.
The government is also exploring similar arrangements with ASEAN member countries, modeled on the existing Pakistan-China currency swap agreement.
Officials said agreements with Russia and Iran could open new trade avenues, while broader swap arrangements may help reduce pressure on foreign exchange reserves by allowing settlements in local currencies.
Under the existing Pak-China arrangement, Pakistan has availed a $4.5 billion trade facility, though much of it has been used for debt settlement.
The development comes as Pakistan faces $4.8 billion in external debt repayments this month, including the $1.3 billion Eurobond payment already made, according to Finance Minister Muhammad Aurangzeb.
The PM Office has also asked the Finance Ministry and the State Bank of Pakistan to work on bringing the policy rate below 10 percent, stabilizing the currency market, checking dollar hoarding, and using the Asian Clearing Union mechanism for trade settlements.
Officials said the government has additionally been tasked with keeping the current account deficit below $3 billion, lowering the debt-to-GDP ratio, and supporting medium term GDP growth targets.
