Pakistan, which is facing financial crisis, is getting trapped in such a quagmire of poverty, from where the way out of it is not easy. Pakistan’s foreign exchange reserves, which are constantly seeking help in international forums, have reached their lowest level in the last three years. According to the data of the Central Bank, Pakistan’s foreign exchange reserves have fallen by $ 303 million to $ 7.50 billion. Pakistan’s foreign exchange reserves are at their lowest level since July 2019.
According to Geo News, on September 30, Pakistan’s foreign exchange reserves were recorded at $ 7.89 billion, which decreased to $ 7.59 billion in just one week i.e. till October 7.
There is only importable money left in Pakistan’s treasury for 6 weeks. The central bank said in a statement that the reason for the decrease in foreign currency is to repay debts from foreign countries, which include commercial loans and Eurobond interest.
Debt-ridden Pakistan had also sought financial help at the international level to avoid defaulting and strengthen currency reserves, but even before the aid, the flood caused such devastation, which destroyed one-third of Pakistan.
The sinking economy of Pakistan suffered a major setback due to the floods. The Pakistan government also sought help from the world regarding the floods. The UN also appealed to Pakistan to release funds from other countries as soon as possible to recover from the floods.
Alarm bells rang for Pakistan
At present, due to political instability in Pakistan and depletion of foreign exchange reserves, the country’s economic system is facing serious challenges. Especially for Pakistan, it is a matter of concern that due to increasing imports, foreign exchange reserves are decreasing by $ 300 to 400 million every week. Pakistan’s foreign exchange reserves have come down below $ 8 billion, which is indeed a warning bell for the country.
Opposition leader surrounded Shahbaz Sharif government
PTI leader and former planning minister Asad Umar said that Pakistan has exhausted more than half of its reserves since the Shahbaz government came to power. Asad Umar further said that this crisis will deepen as the government is currently busy dealing with its corruption cases.
Former Pakistan government minister Asad Umar claimed that the situation of foreign exchange reserves was not so serious even till the no-confidence motion was brought against Imran Khan. As soon as the Shahbaz government came to power, the foreign exchange reserves halved in a few days.
Another 300 million $ drop in state bank reserves this week. We have lost more than half the reserves which were there when no confidence motion was filed. The crisis continues to deepen as govt too busy getting their corruption cases wound up.
— Asad Umar (@Asad_Umar) October 13, 2022
Floods wreaked havoc and weakened Pakistan
Due to incessant rains in many areas of Pakistan, lakhs of people had to face floods. The situation became such that thousands of people were taken to other safe places leaving their homes, villages and a large number of people lost their loved ones in this flood.
Especially in the hilly areas, the situation was more dire and for a long time Pakistani security forces pulled out the people trapped there. The impact of the floods was seen in one third of Pakistan, which left a big hole in the boat of the economy.
All is not well in Pakistan for the last several months
In the last few months, from Imran Khan to Shahbaz Sharif’s power in Pakistan, while on the one hand, Pakistan continued to face political instability, on the other hand, due to the floods, life was disturbed to millions. In such a situation, the economic vehicle of Pakistan picked up a more slow pace.
However, in August, Pakistan got financial help of $ 1.1 billion from the IMF (International Monetary Fund) to improve the economy. But funds from World Bank and Asian Development Bank are still awaited. At the same time, promises of investment of five lakh dollars have also been made to Pakistan from the Arab countries, which will probably start being fulfilled from the year 2023.