Islamabad January 18 2023: Pakistan’s central bank governor Jameel Ahmad said the nation will see dollar inflows in the coming days after funding commitments from the Middle East, a move that could bolster finances for the cash-strapped nation.
The central bank’s biggest strain is limited resources, Ahmad said at an event hosted by the Karachi Chamber of Commerce & Industry. The governor also said the central bank used to intervene in the interbank market in the past but it is not in a position anymore because of dwindling reserves.
The statement comes amid economic and political woes faced by the nation. Dollar shortage and restricted imports have hurt local businesses leading to multiple shutdowns.
The South Asian nation is struggling to pay for its imports as its foreign exchange reserves have dwindled to about $4.34 billion, covering less than a month of imports. About 6,000 containers of essential food items, raw materials, medical equipment and others are held up at various ports, said Mohammed Tariq Yousuf, President at Karachi Chamber of Commerce & Industry. Banks have also refused to issue new letters of credit for importers.
Pakistan’s economic crisis deepened after the International Monetary Fund delayed its latest loan installments. Financial assistance from friendly nations may provide some relief in the medium term. United Arab Emirates has agreed to loans of $3 billion, while Saudi Arabia is considering an investment of nearly $10 billion.