The country is currently embroiled in a political crisis that is deteriorating by the day. Since the arrest of the ex-premier, the rupee has plummeted to an all-time low, decreasing by 3.3%. While this decline began before the current political unrest, the economy has been plagued by high inflation and numerous global and domestic shocks.
Even before this latest drop, the previous rate of Rs 288 was making life unlivable for many individuals. While some senior bankers are attributing this rise to other factors, such as poor foreign exchange reserves and consistent IMF delays, the correlation with current circumstances is more obvious. In addition to this latest devaluation, foreign direct investment has decreased, and default seems imminent. If the situation does not calm down soon, it will only get worse, especially for our debt relief status and IMF review. It gives the fund a reason to stay away until stability is achieved.
Regardless of whether the country defaults, the situation for citizens living in Pakistan is dire. If life was already difficult with an impending food crisis, medicine shortages, and a general sense of malaise, there are now security threats to contend with. The damage to the economy from rioting, internet shutdowns, and overall despair is evident, but the true wreckage can only be realised after the situation subsides.
There are numerous issues to consider now, including the IMF delay, and the overall fact that we are in a constant nosedive of the economy. The possibility of default has increased with the current shutdown of the country, and it seems like a hopeless situation. Not only has the dollar appreciated, but remittances have also fallen. As mentioned, there is no single problem to address, but rather an interconnected web of economic turmoil. For the time being, it is hoped that sense prevails on the political side of things so that we can begin to address this uncontrollable situation.