| Welcome to Global Village Space

Thursday, February 29, 2024

Drop in Current account deficit by 19pc

The current account declined by 42 percent, or $512 million, month on month, to $703 million in August 2022, from $1.2 billion in July 2022.

The country’s current account deficit shrank by 19 percent in the first two months of this fiscal year (FY23) because of lower imports and higher exports. The State Bank of Pakistan (SBP) said on Wednesday night that the country recorded a cumulative current account deficit of $1.92 billion in July-August of FY23, compared to $2.374 billion at the same time last fiscal year, a decrease of $456 million.

According to the SBP, the decrease in the current account deficit is owing to an 11 percent increase in exports and a 2 percent decrease in imports.

The current account declined by 42 percent, or $512 million, month on month, to $703 million in August 2022, from $1.2 billion in July 2022.

Read more: Drop in trade deficit at the expense of fall in production

To relieve external account pressures and maintain foreign exchange reserves, the State Bank has implemented a variety of measures to limit imports.

Imports fell by $240 million to $11.98 billion in the first two months of this fiscal year. However, exports increased by $519 million in two months to $5.093 billion.

The country is in the grip of a severe liquidity crisis and is working hard to replenish its dwindling foreign exchange reserves. Pakistan has got $1 billion in IMF inflows as part of the Extended Fund Facility tranche.

On September 18, the Saudi Fund for Development (SFD) confirmed a one-year rollover of $3 billion in deposits with Pakistan. The funds were deposited by the SFD for a one-year period ending in December 2021 as part of an agreement between the SFD and the State Bank of Pakistan to replenish Pakistan’s decreasing foreign exchange reserves.