Pakistan is facing dire economic crisis, with foreign exchange reserves decreasing by US $190 million last week to stand at $10.31 billion, lowest since June 2020. this means that the central bank has just enough funds to cover less than 2 months of imports. This is a situation that no country wants to be ever, and Pakistan, with its newly instated Prime Minister Shehbaz Sharif hopes for some miraculous intervention.
Nevertheless, it is believed that the government is finally taking some serious steps. Although, these steps might seem like small reforms, one can only hope its is better than nothing. In the latest, sources said that Sharif has banned import of luxury cars and non-essential commodities including cosmetics and high-end garments and such. The government has also issues specific instructions regarding this restriction.
The decision is a necessary one for the cash-strapped country, as the value of Pakistani Rupee is constantly dropping. Currently, US $1 is traded at nearly 198 Pakistani Rupees. This signifies the lack of confidence in the market in regards to the country’s economic growth. This has led to massive inflation in the country, affecting the common people the most. If the Rupee continues to drop, another country might have to face another wave of inflation. Also, ongoing global scenario, with Ukraine-Russia war and rising petroleum prices are not helping the Pakistan.
According to sources, as for other imports like machinery, home appliances, and mobile phones, the Federal Board of Revenue (FBR) has proposed to hike regulatory duty. If approved, this might be a decision in the right direction.