KARACHI: Pakistan is in the midst of a liquidity crunch with its dollar reserves extremely low, talks between between the International Monetary Fund and the government stalled over the release of its latest tranche, and the finance ministry insisting that Pakistan will not default.

Foreign exchange reserves remain on the wane and are currently hovering at the $13.37 billion level. According to the weekly report, State Bank of Pakistan (SBP) held foreign exchange reserves of $7.5 billion.

The central bank has taken certain steps to curtail the outflow of dollars, including a spending limit on credit and debit cards for international transactions, suspending Google apps payments and monitoring the issuance of letters of credit (LCs) for imports as it deals with the ever-increasing current account deficit.

Now, the Pakistan Fruit and Vegetable Exporters (PFVE) has said that commercial banks are not clearing the documents of shipments citing non-availability of foreign exchange.

They says that hundreds of containers of imported onion, ginger and garlic were stuck at the Karachi port. Exporters say that 250 containers of onion, 104 of garlic and 63 of ginger are stranded, with a cumulative value of $5.5 million.

In a letter to the Ministry of Commerce, the PFVA pointed out how the delays were resulting in multiplication of cost due to terminal and shipping charges with each passing day.

“The high cost of onion containers would have a serious negative impact on common people, taking onions out of their reach due to high price and hence, the Government of Pakistan’s sincere initiative to provide relief to the common men would be jeopardized,” read the letter.

The PFVA shared that onion is currently available at a wholesale rate of Rs175 per kilogram and retail price of Rs250 to 270 per kilogram. However, due to further delay in clearance, “these rates are anticipated to shoot up”.