It’s raining woes for cash-strapped Pakistan. The shortage of dollars has left the nuclear power’s missions abroad in a lurch, with inadequate funds and unpaid salaries for several months.
Missions in European countries have written to the Foreign Ministry seeking release of salaries backed up for two months.
With dwindling forex reserves, Pakistan’s default risk has worsened. The foreign exchange reserves held by the State Bank of Pakistan (SBP) fell another $784 million to a precarious level of $6.715 billion as of December 2 this year, data released by the central bank showed on Thursday. This is the lowest level of SBP-held reserves since January 2019.
The SBP and Finance Ministry have stopped all payments, including letter of credits (LCs).
A source in Pakistan’s Foreign Office told CNN-News18 that the country’s missions in the European Union and across the world have written to the foreign ministry in Islamabad, requesting it to release salaries and allowances as soon as possible.
The foreign ministry is yet to release payments worth around $5 million with the finance department citing a shortage of foreign currency.
The embassies in America, France, Germany, Oman, Austria, and Belgium have been deprived of salaries for the past two-three months, the source revealed.
Pakistan missions in friendly countries such as Iran, Turkey, and Afghanistan are also facing difficulties in getting dollars for salaries.
Asked about the shortage of funds, spokesperson of Pakistan’s Foreign Office said the finance division is yet to send a reply to the ministry’s query on delay of salaries.
It is no secret that Pakistan’s economy is in doldrums. CNN-News had reported in November that according to the latest data, the cost of insuring exposure to Pakistan’s five-year sovereign debt rose by 1,224 basis points, hitting the highest-ever level of 92.53 per cent.