More Worries For Pakistan? Cash-Strapped Neighbour's Forex Reserves Plunge Amidst Rising Tensions
Pakistan's forex reserves hit amidst the rising tensions between India and Pakistan following terrorists attack killing 26 Indian tourists in Pahalgam.
Pakistan’s forex reserves is reeling under pressure amidst the rising tensions between India and Pakistan following terrorists attack killing 26 Indian tourists in Pahalgam. The escalation rose after India launched ‘Operation Sindoor’ to target terrorist infrastructure in Pakistan and Pakistan-occupied Kashmir.
Recommended Stories
The cash-strapped economy of Pakistan, which is already reeling, is faltering post the restrictions on International flights after the heightened tensions between the two countries.
According to a report by Economic Times, Pakistan has a Foreign Exchange Reserves of $15 billion, which is abysmal in comparison to India’s forex reserve of over $688 billion.
The faltering economy of Pakistan showed some recovery signs in recent pasts after saving marginally from defaulting on its debt in 2022. IMF gave a bailout of $2 billion in March this year, allowing its economy a breathing space for a while.
But the recent tensions and war-like situation is putting the whole progress at stake.
Several international agencies have unanimously decided to bypass Pakistan’s airspace amidst the growing tensions in order to avoid any casualty or untoward event.
Pakistan’s economy is not doing well, said Kranthi Bathini, Equity Strategist at WealthMills Securities Pvt Ltd, to India Today, “the economy is running on debt from various global agencies."
“Any rise in the ongoing geopolitical tensions will definitely put more pressure on the economy. Moody’s has also said that any further escalation by Pakistan will worsen its economic condition," he added.
Arun Pudur, an entrepreneur, in an X post said that “huge blow to Islamabad’s forex from overflight fees worth hundreds of millions" after top airlines – Air France, BA, Emirates, Lufthansa – are avoiding it. In the post he said that barely 15 flights now use Pakistani airspace. Note that he tweeted the post before the Operation Sindoor.
- Location :
- First Published: