Forex reserves of Pakistan decline by $134 million

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Islamabad: In line with the dominant trend of decline in the last several weeks, Pakistan’s forex reserves declined by $134 million in a week, the State Bank of Pakistan said on Thursday.

According to the weekly report by the central bank on the statistics of forex reserves held by the country, the SBP-held reserves of Pakistan fell from $7.959 billion to $7.825 billion during the week that ended on November 18.

Similarly, the forex reserves held by the commercial banks also declined by $17 million to reach $5.81 billion.

Cumulatively, the total foreign exchange reserves witnessed a fall of $151 million to reach $13.645 billion from $14.796 billion during the period under review.

Alarm bells: Pakistan’s reserves fall by $956 million in a week

Current Account Deficit widens to 36% in October MoM

The Current Account Deficit (CAD) of Pakistan widened to 36% in October on a month-on-month basis, the State Bank of Pakistan reported on Monday.

Compared to $363 million recorded in September, the CAD of Pakistan reached $567 million in October. On an MoM basis, that is a 36% jump in deficit. However, on a year-on-year basis, the current account deficit declined sharply by 68% because CAD had hit $1.78 billion in October last year.

Pakistan’s Current Account Deficit shrinks 37% YoY in 1Q of FY23

It is pertinent to mention here that CAD dropped massively during the first four months of the current fiscal year. During the first four months of FY23 (July-October), the deficit clocked in at $2.82 billion, dropping 46.8% or $2.48 billion from the same period last year when CAD had reached an alarming $5.3 billion.

The State Bank of Pakistan attributed the significant shrinkage in CAD to the declining trend in imports.

“Continuous decline in imports helped improve the Current Account Deficit (CAD) during the first four months of FY23,” the SBP stated.

It further said that during the first four months of FY23, imports reduced by $2.7 billion or 11.6%, while exports increased by $0.2 billion or 2.6% compared to the same period last year.

It is also important to note that Pakistan’s CAD had crossed $17 billion during FY22, after a staggering 531% increase in the balance of payments compared to the current account deficit of $2.8 billion recorded during FY21.

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