Forex Reserves of Naya Pakistan fall to $9.03 billion

Pakistan’s foreign exchange reserves fell to $9.03 billion, not enough to cover even two months of imports, from $9.79bn at the end of the last fiscal year. The decline of $753 million or 7.7 per cent in reserves in less than three months comes on the heels of less-than-desired growth in exports and remittances amid large import bills and a big current account deficit.

In July-August, combined earnings via exports of goods and services and remittances totalled $8.921bn, according to the balance of payments (BoP) statement. Against this, imports of goods and services consumed $11.579bn. So a huge gap of $2.66bn existed even if we count on both exports and remittances to finance our total imports. The current account deficit stood at $2.72bn. The overall BoP witnessed a gap of $430m. The rupee has lost 2.26pc of its value against the dollar in the interbank market in less than three months of this fiscal year (up to Sept 27).

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Deep cuts in development funding will slow down economic growth, which may affect the private-sector credit appetite
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The PTI government is trying to shape up the BoP with thicker flows of foreign investment, including a strategic Saudi investment in the China-Pakistan Economic Corridor (CPEC), while keeping its focus on exports and investment intact. Meanwhile, it is also keeping the International Monetary Fund (IMF) borrowing option open.

However, indicators show that currently the external account situation is far from promising.

SOURCE : DAWN

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