Current account deficit saw a steep fall between July-Nov this year. The Advisor to the Prime Minister on Finance Dr. Abdul Hafeez Shaikh said that current account deficit has seen a decline of 72.6 in November and a total decline of 73% has been recorded between July-Nov of the current year.
In his tweet the advisor said, “Current Account Deficit is down by 72.6% in Nov 2019 & 73% between July-Nov 2019 vs same period in 2018. In 5 months, increase in SBP Reserves by $1.8B & reduction of $3B in FX swaps/forward liabilities increased FX buffer by $4.8B providing further stability to external account”.
The current account deficit shrank to $1.8b in the first five months of the current fiscal year from July-Nov. In particular, the deficit of $6.7b has been recorded in the same period, one year ago. The data shows a steep decline in current account deficit.
Consequently, the Current Account Balance also narrowed for the same period by 70.92pc. It was previously stood at $7.088, which has now seen a decline and recorded $2.06 billion.
However, high interest rates are continued to be a worry point for Pakistani business community.
The trade balance and remittances for the same period also jumped by a significant margin. Earlier, the fresh numbers for exports came and indicated a fraction increase of 4.3%.
On the same side, the IMF is now satisfied with the progress and declared that Pakistan economy is now stabilizing.
Increase in Reserves
In accordance to this, SBP also released a statement claiming that the SBP’s foreign exchange reserves are now surpassed $10b and an increase of $1.65 billion has been recorded. The total liquid reserves are now stood at $17.65 billion with $10.89 billion in SBP’s possession and commercial banks hold the remaining.
However, high interest rates are continued to be a worry point for Pakistani business community. They claim that holding a tight monetary policy is affecting businesses and various startup projects, also forcing businessmen to put a hold on major business initiatives. Reza Baqir, SBP governor said while he was addressing a ceremony hosted by the central bank in Faisalabad that improvements are being witnessed in the stock market but it will take more time to reduce the interest rate.
The overall policy of the economic team is now bearing fruits. IMF has also released the latest share of amount from the agreed $6b, hinting that the economy is running towards stability.