Pakistan's economy is going through a turbulent period as inflation in the country has risen to a historical high of 42% and foreign exchange reserves have depleted to $6.7 billion, barely enough for a month of imports. Pakistan's currency has been devalued so bad that the country is now buying 1 dollar for 224.63 Pakistani rupees.
Exports are declining in Pakistan and the country doesn't have enough foreign exchange reserves to pay for the imports.
Imports from Afghanistan and Iran have also slowed down because Pakistan doesn't have enough dollars to pay.
Selling of old embassy building in US: The crunchy economic situation has also forced the Pakistani government to sell its old embassy building in US.
Pakistan Embassy in US has received a nod from the foreign office to sell its old building, which was lying vacant for the last 15 years, ARY news quoted.
The building located in Washington is reported to be for around $5-6 million.
Shortage of medicines in the market: The economic crisis has also pushed pharmaceutical companies to the wall.
Since the imports have fallen, the raw materials used in the production of drugs have also severely been affected.
Pakistan imports 19% of raw materials for making medicines and since the banks have refused opening Letters of Credit (LC), several important medicines have vanished from the market.
Even the drugs used for treatment of diabetes, as well as Vitamin C supplements are in reduced supply.
Not only the pharma sector; it is reported that several industries in Pakistan are on the verge of collapse as the banks have refused to open LCs, which has stopped the import of raw materials in Pakistan.
Saudi Arabia to provide financial support to Pakistan: Pakistan's economy has been running on International Monetary Fund (IMF) for a long time.
The IMF agreed to extend the stalled bailout package by up to one year and increased the loan size to $8 billion, giving some sort of a breather to its newly elected Prime Minister Shehbaz Sharif.
However, poor management of economy and political uncertainty ended up taking Pakistan on a downward spiral.
Now, Pakistan is looking to secure a multi-billion-dollar financial support package from Saudi Arabia.
The two officials from the Finance Ministry of Pakistan who spoke to news agency Reuters, said that the package would include deposits boosting the country's foreign reserves on oil on deferred payments.
"Pakistan has brother relations with Saudi Arabia. Both the countries have helped each other in times of need," a finance media officer told Reuters.
Pakistan's Finance Minister Ishaq Dar said last week that the country was hoping to conclude talks with Saudi Arabia for financial help. Dar also said that earlier this month, Riyadh had extended the terms of a $3-billion deposit.
The financial bailout package from the Middle Eastern country is expected to ease the economic distress of Pakistan as it faces a severe balance of payment crisis.