Islamabad: Pakistan’s economic crisis continues to worsen, with its foreign exchange reserves plummeting to around 2.9 billion US dollars and none of the “friendly” countries, including traditional supporter Saudi Arabia, ready to help.
The depleting foreign exchange reserves, which has already forced major automobile companies like Pakistan Suzuki and Atlas Honda to shut down manufacturing plants temporarily, reduces further the country’s scope for imports.
The State Bank of Pakistan (SBP), the central bank of the country, has reported that the foreign exchange reserves held by it have slipped to $2,916.7 million as of February 3 from $3.08 billion on January 27.
The further depletion was on account of external debt repayment, it said in a statement.
The coalition government is desperately trying to unlock the IMF deal, with the lender’s mission in Islamabad to negotiate the terms for resuming the Extended Fund Facility (EFF), which will pave for Pakistan to get more than $1 billion from the institution.
The Pakistan government and the SBP were banking on friendly countries, including Saudi Arabia, to help boost the reserves but none of the nations has so far delivered on its commitment, leaving Pakistan in a critical position, the Geo News reported today.
As a result of the depleting foreign exchange reserves, imports have been hit hard as commercial banks are reluctant in opening letters of credit (LCs), making it next to impossible for businesses to stay afloat, it said.
Major automobile makers — Atlas Honda and Pak Suzuki Motors Company — have repeatedly stopped their car production due to an inventory crunch caused by paucity of liquidity.
Also read:Economic crisis forcing shut down of automobile plants in Pakistan
The government, meanwhile, is making desperate attempts to get a loan of about $1 billion from the International Monetary Fund (IMF), whose team is in Islamabad for negotiations.
The global lending body has put tough conditions for Pakistan to avail of its loans, which include sweeping economic reforms that is bound to lead to high inflation.
