Pakistan

In 2023, Pakistan’s exchange rate volatility will intensify, and it has depreciated by 22% since the beginning of the year, further pushing up the government’s debt burden. As of March 3, 2023, Pakistan’s official foreign exchange reserves were only US$4.301 billion. Although the Pakistani government has introduced many foreign currency control policies and import restriction policies, coupled with recent bilateral assistance from China, Pakistan’s foreign exchange reserves can barely cover 1 monthly import quota. By the end of this year, Pakistan needs to repay as much as $12.8 billion in debt.

Pakistan has a heavy debt burden and a high demand for refinancing. At the same time, its foreign exchange reserves have fallen to an extremely low level, and its external repayment capacity is very weak.

Pakistan’s central bank said containers full of imported goods were piling up at Pakistani ports and buyers were unable to get dollars to pay for them. Industry groups for airlines and foreign companies have warned that capital controls to protect dwindling reserves are preventing them from repatriating dollars. Factories such as textiles and manufacturing are closing or working shorter hours to conserve energy and resources, officials said.

Turkey

The catastrophic earthquake in Turkey not long ago made the already high inflation rate continue to soar, and the latest inflation rate is still as high as 58%.

In February, the unprecedented cellular swarm nearly reduced southeastern Turkey to ruins. More than 45,000 people died, 110,000 were injured, 173,000 buildings were damaged, more than 1.25 million people were displaced, and nearly 13.5 million people were directly affected by the disaster.

JPMorgan Chase estimates that the earthquake caused at least US$25 billion in direct economic losses, and future post-disaster reconstruction costs will be as high as US$45 billion, which will occupy at least 5.5% of the country’s GDP and may become a constraint on the country’s economy in the next 3 to 5 years. The heavy shackles of healthy operation.

Affected by the disaster, the current domestic consumption index in Turkey has taken a sharp turn, the government’s financial pressure has increased sharply, the manufacturing and export capabilities have been severely damaged, and the economic imbalance and twin deficits have become increasingly prominent.

The lira exchange rate suffered a severe setback, falling to an all-time low of 18.85 lira per dollar. In order to stabilize the exchange rate, the Central Bank of Turkey has used 7 billion US dollars of foreign exchange reserves within two weeks after the earthquake, but it still failed to completely curb the downward trend. Bankers expect authorities to take further steps to reduce foreign exchange demand

Egypt

Due to the lack of foreign exchange required for imports, the Central Bank of Egypt has implemented a series of reform measures including currency devaluation since March last year. The Egyptian pound has lost 50% of its value over the past year.

In January, Egypt was forced to turn to the International Monetary Fund for the fourth time in six years when $9.5 billion worth of cargo was stranded at Egyptian ports due to a foreign exchange crunch.

Egypt is currently facing the worst inflation in five years. In March, Egypt’s inflation rate exceeded 30%. At the same time, Egyptians are increasingly relying on deferred payment services, and even choose to deferred payment for relatively cheap daily necessities such as food and clothes.

Argentina

Argentina is the third largest economy in Latin America and currently has one of the highest inflation rates in the world.

On March 14 local time, according to data released by the National Institute of Statistics and Census of Argentina, the country’s annual inflation rate in February has exceeded 100%. This is the first time that Argentina’s inflation rate has exceeded 100% since the hyperinflation event in 1991.