Islamabad: Pakistan’s forex reserves plunged heavily by $245.4 million to settle at a near nine-year low of $5.57 billion, the State Bank of Pakistan (SBP) reported.
The data by the central bank showed that during the week that ended on 30 December 2022, the SBP-held forex reserves fell sharply. Similarly, those held by commercial banks also dropped by $39.3 million to clock in at $5.846 billion.
Cumulatively, the net reserves plunged $284.7 million to settle at $11.42 billion during the period under review.
The SBP data showed that in 2022, the cumulative forex reserves of Pakistan fell to $11.42 billion from $23.88 billion at the start of the year. During the year, the SBP-held reserves declined from $17.68 billion to $5.57 billion — enough only to cover a little over one month’s imports.
This contributes to the worrisome situation the country finds itself in, as the reserves are also not enough to service its huge foreign debt. Despite repeated assurances from Finance Minister Ishaq Dar that the country will not default, the ground realities hardly support his claims.
July-December trade deficit shrinks 32.65% to $17.13 billion
The trade deficit of Pakistan has also shrunk 32.65% to clock in at $17.13 billion during the first six months (July-December) of the current fiscal year compared to the same period last year when it had amounted to $25.438 billion, according to the Pakistan Bureau of Statistics (PBS).
According to the monthly statistics by PBS on trade, a massive cut was observed in imports in line with the steps taken by the incumbent government to ease the pressure on import bills during the first six months of FY23. Imports amounted to $31.382 billion during the period, as compared to the $40.463 billion that had been recorded during the same period last year.
Exports, however, also fell during the time to clock in at $14.249 billion from $15.125 billion recorded last year.
In December alone, the trade deficit shrank 40.68% on a year-on-year basis, as the trade imbalance amounted to $2.857 billion compared to the $4.816 billion that was recorded last year.
On a month-on-month basis, however, the trade imbalance rose slightly by 2.36%.
It is pertinent to mention that the trade deficit of Pakistan had recorded a whopping increase of 55.7% during the fiscal year 2022, taking the total imbalance between imports and exports to $48.38 billion.
However, the recent steps taken by the government to ban the import of unessential items have proved to be a remedy to decrease the pressure of trade imbalance.