Foreign Exchange Reserves Drops And Current Account Deficit Goes Up
Foreign Exchange Reserves Drops And Current Account Deficit Goes Up:
Pakistan’s foreign exchange reserves fell to $17.545 billion during the week ended April 13 from $17.639 billion a week ago, shared by the State Bank of Pakistan (SBP). The foreign exchange reserves held by the State Bank of Pakistan (SBP) dropped $58 million to $11.379 billion. This is attributed to external debt servicing and other official payments. The forex reserves of commercial banks declined to $6.165 billion as compared to $6.201 billion in the previous week.
While on the other side account State Bank of Pakistan (SBP) reported Pakistan current account deficit continued to expand as the gap widened 50.6% year on year to $12.03 billion in the 9 months of the current fiscal year.
State Bank of Pakistan (SBP) informed that the deficit now stands at over $12 billion during July-March. Government is expecting current account deficit to slow down to $12.5 billion. Current account deficit suggests that measures taken by the government have yet to take effect, which includes devaluation of the currency in two phases, and imposing regulatory duty to curtail imports. The deficit may continue to increase by an additional $100 million per month on a year on year basis due to uptrend in international oil prices, as Pakistan remains a net oil and gas importing country.
State Bank of Pakistan further added that the exports of goods increased 11.97% to $18.26 billion in the nine-month period, compared with $16.31 billion in the same period last year and the import of goods surged 16.60% to $40.56 billion from $34.79 billion in the corresponding period last year.
The trade deficit (of goods and services) increased 22.48% in the period under review to $26.15 billion from $21.35 billion.
Foreign shipments remain on the higher side due to heavy imports of machinery and other construction material for multi-billion dollar projects under the China-Pakistan Economic Corridor (CPEC). Foreign direct investment in the nine months improved 4.4% to $2.09 billion from $2 billion in the same period last year. A significant portion of the foreign investment in local businesses is coming from China.
As per fiscal experts the government would further devalue the rupee against the dollar and other world major currencies during the ongoing fiscal year to bring the currency at an equal with its earls in order to create some sort of balance in external trade and the overall economy.
For More Information & Videos Subscribe To Our YouTube Channel