KARACHI (Reuters) – Pakistan banned imports of non-essential luxury products in a bid for stabilization. The information minister described the situation on Thursday as an economic emergency.

Pakistan’s current account deficit spiralled out of control, and its foreign reserves have plunged. The rupee is now at historic lows in relation to the U.S. Dollar.

Minister Marriyum aurangzeb stated to reporters that all non-essential luxury goods have been banned from import.

According to her, the measures will address fiscal instability. This was blamed on Prime Minister Imran Khan’s previous government, who she said is responsible for the no confidence vote that took place last month. He had been accused of mishandling of the country’s economy.

She said, “There’s an emergency situation in this country.”

Cars, cellular phones and home appliances are among the banned imports.

Although it was unclear how long the ban would remain in effect, Aurangzeb stated that the move along with other fiscal measures will help to preserve critical foreign currency reserves over the next two-months. According to Aurangzeb, the measures would help save $6 billion per year.

Pakistan is a major importer of oil and fuel. This will continue to be the case.

Some projections show Pakistan’s current balance deficit in the financial year to be around $17billion or 4.5% of its GDP. This is due to a rising import bill, and an increase in global commodity prices.

The Pakistani foreign currency reserves are rapidly declining: the funds that the central bank holds fell by $6 billion, from $16.3 billion at February’s end to $10 billion in May.

The Pakistani finance team has been in discussions with the International Monetary Fund (Qatar capital Doha) to revive a funding program it started in 2019. However, this programme was stalled due to Pakistan’s failure to implement the necessary policy actions to be eligible for funds.