KARACHI – The foreign exchange reserves held by the State Bank of Pakistan (SBP) dropped by $140.4 million to $7,638.9 million in the week ending on September 8, 2023, shows official data.
However, the reserves held by the private banks surged by $92.2 million to $5,440.2 million from previous week’s $5,347.4 million.
Overall, Pakistan witnessed a drop of $47.6 million in its total foreign exchange reserves held by both SBP and private banks. The liquid forex reserves currently stand at $13.08 billion.
Total liquid foreign #reserves held by the country stood at US$ 13.08 billion as of September 08, 2023.
For details https://t.co/WpSgomnKT3#SBPReserves pic.twitter.com/RlQ7SNQHbN— SBP (@StateBank_Pak) September 15, 2023
Meanwhile, the current account deficit shrank by 54% during the first two months of the current financial year 2023-24 mainly due to a significant reduction in the import bill of the country.
According to data released by the State Bank of Pakistan, the current account deficit decreased to $935 million during July to August 2023 as compared to $2.035 billion recorded in a similar period of the last year.
The current account deficit fell sharply in August to $160 million from $775 million reported in July, according to the SBP.
The trade deficit of goods declined to $3.94 billion during July-August 2023 from $6.52 billion recorded in 2022, showing a saving of $2.57 billion or a drop of 39% year-on-year. On the other hand, the services deficit showed a reversed trend as it went up to $463 million in the first two months as compared to $169 million reported in a similar period of the last year.
Remittances inflows also saw a drop of over $1 billion in the first two months. It decreased to $4.12 billion in July-August 2023 from $5.25 billion reported in the corresponding period of the last year.
The interim government will likely to maintain strict measures on imports to control the deficit position of the current account.
The slight growth in exports of goods is commendable but the trend should continue to grow in the remaining period. On the other hand, the remittances inflows should be revived to stabilize further the current account position.
