For Pakistan, which is starving for cash, problems are pouring down. The lack of cash has placed the nuclear power’s embassies abroad in a bind, with insufficient funds and underpaid employees for several months. Missions in European nations have written to the Foreign Ministry requesting the release of salaries that had been held back for two months.
Pakistan’s default risk has gotten greater as a result of declining foreign exchange reserves. According to figures provided by the central bank on Thursday, the foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by another $784 million as of December 2 to a dangerous level of $6.715 billion. SBP-held reserves are at their lowest level since January 2019.
All payments, including letter of credits, have been halted by the SBP and Finance Ministry (LCs). According to a source in Pakistan’s Foreign Office, the country’s embassies in the United States, Canada, the European Union, and other countries have written to the foreign ministry in Islamabad pleading with it to deliver salary and benefits as soon as possible.
Due to a scarcity of foreign currency, the finance department has refused to deliver payments totaling almost $5 million to the foreign ministry. The insider said that for the previous two to three months, salaries had not been paid to the embassies in America, France, Germany, Oman, Austria, and Belgium. There are issues with acquiring dollars for pay for Pakistani embassies in friendly nations like Iran, Turkey, and Afghanistan.
When questioned about the lack of finances, a representative for the Pakistani Foreign Office stated that the finance division has not yet responded to the ministry’s inquiry over the delay in wages. The state of Pakistan’s economy is not a secret. The cost of insuring exposure to Pakistan’s five-year sovereign debt increased by 1,224 basis points, according to the most recent statistics, reaching the highest-ever figure of 92.53 percent, CNN-News had reported in November.
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