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Foreign exchange crisis: Pakistan's economy grinding to a halt as ... - RTL Today

Last updated Sunday, January 15, 2023 05:05 ET , Source: TopWireNews

Thousands of containers packed with essential food items, raw materials and medical equipment have been held up at Pakistan's Karachi port as the country grapples with a desperate foreign exchange crisis.
A shortage of crucial dollars has left banks refusing to issue new letters of credit for importers, hitting an economy already squeezed by soaring inflation and lacklustre growth.
"I have been in the business for the past 40 years and I have not witnessed a worse time," said Abdul Majeed, an official with the All Pakistan Customs Agents Association.
He was speaking from an office near Karachi port, where shipping containers are stuck waiting for payment guarantees -- packed with lentils, pharmaceuticals, diagnostic equipment and chemicals for Pakistan's manufacturing industries.
"We've got thousands of containers stranded at the port because of the shortage of dollars," said Maqbool Ahmed Malik, chairman of the customs association, adding that operations were down at least 50 percent.
State bank forex reserves this week dwindled to less than $6 billion -- the lowest in nearly nine years -- with obligations of more than $8 billion due in the first quarter alone.
The reserves are enough to pay for around a month of imports, according to analysts.
Pakistan's economy has crumbled alongside a simmering political crisis, with the rupee plummeting and inflation at decades-high levels, while devastating floods and a major shortage of energy have piled on further pressure.

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