Central Bank of Pakistan announced reduction in current account deficit in Jan
2023.02.20 09:32
Central Bank of Pakistan announced reduction in current account deficit in Jan
By Kristina Sobol
Budrigannews.com – As the rupee’s depreciation slowed imports, Pakistan’s current account deficit (CAD) decreased to $0.2 billion in January 2023, a 90% decrease from the previous year, the central bank reported on Monday.
After the removal of artificial caps, the cash-strapped nation’s currency has lost more than a quarter of its value against the U.S. dollar in less than a month, and fuel prices have increased by more than a fifth as the government implemented fiscal measures required to unlock funds from an IMF bailout.
The country’s current account deficit decreased by 67% to $3.8 billion during the first seven months of the current fiscal year, from $11.6 billion during the same time last year.
Mohammad Sohail, CEO of Topline Securities, stated, “This monthly deficit is lower than expectations and the lowest after 25 months.” Sohail, citing the currency’s decline. Import costs have increased as a result of the weaker currency, effectively cutting them in half.
According to Tahir Abbas, Head of Research at Arif Habib Limited, strict administrative measures implemented by the State Bank of Pakistan (SBP) were primarily to blame for the 47% and 61% declines in imports for the machinery and transport groups, respectively.
