The reserves of the State Bank of Pakistan have dwindled to only $9.32 billion, hardly enough to cover imports for 45 days.
Sheikh Rashid Ahmed, Pakistan's former Interior Minister, warned on Sunday that the nation is on the verge of an economic catastrophe and that there is "limited time" left to rescue the country.
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"There is very little time left to save the country from the `economic apocalypse. Political instability is taking the country towards default," Rashid wrote on his official Twitter handle on Sunday.
According to The Express Tribune, the election for Punjab's chief minister has sparked fresh political unrest.
Politicians from the opposition and coalition parties were locked in a fierce struggle over the contested Punjab CM election, which saw Hamza Shahbaz maintain his job on technical grounds.
Hamza won with 179 votes over Chaudhry Pervez Elahi's 176, according to the Punjab Assembly deputy speaker, but only after 10 votes from Elahi's own party were not tallied, which helped Hamza win.
According to The Express Tribune, the Supreme Court ruled on Elahi's appeal on Saturday, ordering Hamza Shehbaz to serve as Punjab's 'trustee' chief minister until the next hearing on July 25 (Monday).
Asked about the current political climate, Rashid said, "We have to make important decisions before August 30, otherwise no government would be able to function."
In another tweet, the former Interior Minister asked, "Why did Attorney General (Ashtar Ausaf Ali) leave the country leaving aside important legal and constitutional matters."
PML-N leader Rashid has accused the governing party of launching an anti-judicial campaign and has demanded CM Hamza to 'pack his bag'. In addition, he predicted that this year's general elections will take place in October or November, regardless of the circumstances.
Rashid added that politics in the country is only possible under a 'strong state'. "Today dollar is not available for import of raw materials," he added.
The rupee has lost about 20% of its value in only seven months since January 2022, as well as Pakistan's rapidly depleting foreign currency reserves and rising fiscal and current account deficits.
The reserves of the State Bank of Pakistan have dwindled to only $9.32 billion, hardly enough to cover imports for 45 days. To prevent a "default," the SBP must maintain foreign currency reserves of at least USD 7.5 billion.
Political instability in Pakistan threatens to thwart attempts to win back the trust of crucial lenders. Investors fear that the nation would follow Sri Lanka and become the next developing economy to default on foreign loans, causing the country's currency to suffer its worst week in more than two decades.
Federal cabinet members vote to sell public assets in a last-minute effort to avoid default. The 'Inter-Governmental Commercial Transactions Ordinance 2022' has been passed by the government to skip all processes involved in the sale of public assets and eliminate regulatory inspections.
The hasty sale of public assets to foreign nations is considered as a desperate effort to rescue the government from debt. There is still no trace of President Arif Alvi's signature on the decree.
(With inputs from ANI)
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