Pakistan imports threatened as forex reserves hit $5.6b

Pakistan's central bank forex reserves have plunged to an eight-year low of $5.6 billion, posing a serious challenge for the country in financing imports.

Coupled with another $5.8 billion held by commercial banks, the nation has $11.4 billion in reserves -- enough to pay for just three weeks of imports, traders and economists say.

"This is a very grave situation. If things get worse, Pakistan will need to have its loans restructured," said Mohammad Sohail, the head of economic watchdog Topline Securities in Karachi, alluding to a possible default.

Pakistan's economy has crumbled alongside a simmering political crisis, with the rupee plummeting and inflation at decades-high levels, but devastating floods and a global energy crisis have piled on further pressure.