Panic was high following Finance Minister Senator Ishaq Dar’s remarks in an interview where he said that the dollars held by commercial banks also belonged to the country; making the reserves roughly $10 billion. The comment created a panic sentiment amongst dollar depositors in the country worrying about the government taking over their reserves.
Why did people panic?
This is not the first time depositors of foreign exchange found themselves in a tough position. In 1998, the then prime minister Nawaz Sharif declared a state of emergency following Pakistan testing five nuclear devices. The US government had imposed economic sanctions on Pakistan, along with Japan, one of the largest aid donors of the country.
As a result of a surprise move, on May 28, the government ordered banks to remain closed across the country; and all foreign currency accounts worth $7 billion were frozen. The finance minister at that time Sartaj Aziz said that these measures were necessary to stop the flight of foreign money which would bankrupt the country.