Forex reserves of Pakistan drop by massive $302 million; reach lowest level since July 2019

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Pakistan repays bond

Islamabad: The forex reserves of Pakistan took another hit and dropped by a massive $302.9 million to reach $7.596 billion – the lowest level of forex reserves since July 2019.

According to a weekly report published on the status of forex reserves by the State Bank of Pakistan, as of October 7, the SBP-held reserves fell to $7.59 billion from $7.89 billion on September 30.

Similarly, the net reserves held by the commercial banks also dropped by $39 million to reach $5.64 billion from $5.68 billion.

Cumulatively, the total foreign exchange reserves witnessed a fall of $342 million to reach $13.24 billion from $13.58 billion during the period under review.

Trade deficit of Pakistan declines 21.42% YoY in first quarter of FY23

The trade deficit of Pakistan recorded in the first quarter of the fiscal year 2023 declined 21.42% on a year-on-year basis, the Pakistan Bureau of Statistics (PBS) reported earlier this month.

According to the provisional data on monthly trade statistics by PBS, during the first quarter of FY23 (July-September), the trade deficit amounted to $9.2 billion. Compared to the deficit of $11.7 billion recorded during the same period of FY22, that is a sharp 21.42% decline.

The total imports during the first quarter stood at $16.3 billion compared to $18.71 billion recorded last year during the same period. Meanwhile, on a YoY basis, exports rose to $7.1 billion from $6.99 billion recorded last year in the first quarter.

August trade deficit swells to $3.5 billion MoM

In September alone, the trade deficit clocked in at $2.88 billion, falling from August’s $3.58 billion. The imports in September fell to $5.26 billion from $6 billion on a month-on-month basis. Exports, however, also recorded a slight decline on an MoM basis in September as they fell to $2.38 billion from $2.48 billion.

It should also be noted that the trade deficit of Pakistan recorded a whopping increase of 55.7% during the fiscal year 2022, taking the total imbalance between imports and exports to $48.38 billion. Fuelled by the soaring trade imbalance and rising current account deficit, the forex exchange reserves have fallen to the $8 billion level as of September 23.

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