This is perhaps the first time in the history of Pakistan that the country is facing a severe economic crisis. As per statement of the State Bank of Pakistan, official reserves of foreign exchange have touched the alarming figure of $3.09 billion. This amount is sufficient only for the import of three weeks imports.
The country is locked in negotiations with the IMF to release the amount under the stalled bailout programme. If talks of Pakistans officials meet the success with the international donor, then Pakistan will be able to get US dollars from friend countries. It is the only solution to come out of the crisis and save the country from being a defaulter.
The Central Bank of the country said that the main reason for the extremely low level of foreign exchange is external debt repayments. Total foreign exchange reserves, including the amount with the commercial banks, come to $8.74 billion as per the SBP report.
Arif Habib, the renowned businessman, commented that the reserves are at their lowest since February 2014 and now only cover 18 days worth of imports.
Tahir Abbass, the head of research at AHL, said, The country is in dire need of fresh inflows and the resumption of the IMF programme as soon as possible to avoid the crisis.
Although the government is in connection with the International Monetary Fund to take the country out of the crisis, some urgent measures can lower the pressure on lessening foreign exchange reserves. The industrial and service sectors with the potential for export may be encouraged. ?Particularly, the IT sector of Pakistan has big potential to earn urgent foreign exchange.
It is reported that about 2 billion US dollars are smuggled to Afghanistan every month. This smuggling should immediately be stopped by taking strict and appropriate actions.