As the economic crisis intensified due to low foreign reserves and a plummeting Pakistani rupee, Pakistan barred imports of some luxury goods on Thursday under the so-called “emergency economic plan.”
Pakistan’s current account deficit has ballooned out of control, its foreign exchange reserves have collapsed, and the Pakistani rupee has fallen to historic lows versus the US dollar.
Prime Minister Shehbaz Sharif announced the restriction on imports of many luxury products on Twitter, claiming that the measure will save valuable foreign exchange for Pakistan.
The dollar surpassed all records on Thursday, surging above Rs 200 in the interbank market. The US dollar was trading at PKR200.50 on the open market. Meanwhile, Wednesday’s interbank dollar rate was PKR198.39, up from PKR195.74 on Tuesday.
Earlier on Thursday, Information Minister Marriyum Aurangzeb said it was an “emergency situation” and that Pakistanis would have to make some sacrifices as part of the economic program, adding that the impact of the restrictions will be roughly $6 billion. She stated that the measures are intended to alleviate budgetary instability, which she blamed on Prime Minister Imran Khan’s former administration, which was deposed in a no-confidence motion last month over allegations of mismanaging the country economically.
Pakistan’s principal imports are petroleum, edible oil, and pulses, all of which would be unaffected. Cars, cellular phones, household appliances, and cosmetics are among the many goods that will be restricted.
The ban’s duration was not immediately apparent, but Aurangzeb stated that it, together with other budgetary measures, will help conserve important forex reserves for the next 2 months. Pakistan’s foreign currency reserves have swiftly declined from $16.3 billion at the end of February to a little over $10 billion in May.