Amid the economic turbulence in Pakistan, its Prime Minister Shahbaz Sharif lamented the situation and said it was shameful for a nuclear country to beg in front of other nations in order to fulfil the basic demands of its citizens. The statement from Sharif came nearly two days after the United Arab Emirates agreed to extend a $2 billion loan to Islamabad.
The Middle Eastern country also pledge to provide an additional $1 billion as Pakistan struggles to recover from devastating floods this summer and a dire economic crisis.
"Loan is not a good option"
According to The News International, PM Sharif, while addressing the passing-out ceremony of probationary officers of Pakistan Administrative Service (PAS) on Saturday, said it really embarrassed him to ask for further loans, adding that seeking foreign loans was not the right solution. He said that the loans would further escalate the worsening situation, amid the fact that it would have to be returned in a certain time period.
It is worth mentioning that the country has been reeling under the worst economic crisis following a three-month flood that washed away nearly all major crops in the country. However, the situation was not "alright" for Pakistan even before the natural disaster hit the nation. According to multiple local media reports, edible oil was sold at Rs 600 per litre even in the first week of August and ghee at nearly Rs 700 per litre. The situation turned grimmer after the deadly floods, wherein more than 2,000 people were killed and thousands went missing.
In December, local media reported that the cost of cooking gas rose to Rs 1,200 per kg near Afgan border regions while the cost of flour went up to Rs 160-170 per kg.
Pakistan does not have much time to act
According to the official sources of the publication, the government does not have much time to act as foreign exchange reserves held by the State Bank of Pakistan (SBP) are depleting at a rapid pace. As of January 6, the foreign exchange reserves held by the SBP stood at just USD 4.3 billion.
Commercial banks' foreign currency reserves stood at USD 5.8 billion, taking the country's cumulative reserves to around USD 10.18 billion. SBP's reserves have dropped by USD 12.3 billion in the last 12 months; from USD 16.6 billion on January 22, 2022, to USD 4.3 billion on January 6, 2023, reported The News International.
Friendly countries like Saudi Arabia, have been "studying" the possibility of an additional USD 2 billion deposit, but it is not yet clear how much time they will take to make the decision, added the report.
Also Read: OPINION | Flour crisis in Pakistan: Politicians, Army generals are responsible
