Pakistan’s forex reserves fall below the critical $10 billion mark as economy goes into free fall

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<strong>Economic crisis in Pakistan is deepening. After its foreign exchange reserves got a boost with an amount of $2.3 billion from a consortium of Chinese banks flowing in, its forex reserves have once again fallen on June 30 below the $10 million mark. It was $9,816.3 million, down $493 million against $10,309 million on June 24, the State Bank of Pakistan data revealed.</strong></p>
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The SBP has sounded off a warning to the Shehbaz Sharif government. It said that it will be difficult to support imports.</p>
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Unsurprisingly, the country’s current is once again under pressure and hovering around 207 against the US dollar. In late June, it hit a historic low of more than 211. The SBP has also started raising interest rates to contain inflation. The key interest rate is now 15 per cent.</p>
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<strong>Also read: <a href="https://www.indianarrative.com/economy-news/pakistan-could-face-mass-hunger-as-land-use-for-crops-drops-182750.html">Pakistan could face mass hunger as land use for crops drops</a></strong></p>
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The delay in concretisation of the International Monetary Fund (IMF) bailout package has caused more worries. Despite Islamabad increasing tax rates and fuel prices with a view to removing subsidies, it is taking time to materialise.</p>
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Since its birth, Pakistan has borrowed money 23 times from the IMF in the past 30 years.</p>
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Sushant Sareen, Senior Fellow, Observer Research Foundation, in an article said that it is clear that without the IMF coming to the rescue, Pakistan will default and become a Sri Lanka-like crisis on steroids given the scale of the problem.</p>
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He noted that most government expenses —subsidies, pensions, running of civilian government, development projects are being funded by taking on additional debt.</p>