PTI Government’s efforts to boost the foreign exchange reserves have shown the results as the reserves held by the central bank have shot up to one and a half year, striking the $10-billion mark.
The foreign exchange reserves held by the central bank increased 18% on a weekly basis, according to data released by the State Bank of Pakistan on Thursday.
The current account deficit dropped 73% to $1.82 billion in first five months (Jul-Nov) of the current fiscal year compared to $6.73 billion in the same period of previous year, according to the central bank.
Foreign investment in sovereign debt instruments like treasury bills and Pakistan Investment Bonds (PIBs) “accounts for less than one-fifth of the increase in SBP’s net reserve buffers at current levels”, the central bank said
Before this Asian Development Bank has also said that Pakistan is moving towards economic stability and the economy will perform better during the ongoing fiscal year 2019-20.
The ADB, in its Asian Development Outlook 2019 Supplement, said that inflation in Pakistan for the first three months of the ongoing fiscal year averaged 10.1 per cent despite “tight monetary policy and modestly strengthening currency”.
#Pakistan's Economic Affairs Minister @Hammad_Azhar and #ADB DG Werner Liepach today in Islamabad discussed ADB's portfolio, and enhanced support thr public and private sector financing for key and emerging sectors incl #SMEs, #tourism and #ICT. #Pakistan #SMEs @FinMinistryPak pic.twitter.com/DRkrgdLvkl
— ADBPakistan (@PakistanADB) December 11, 2019
Earlier in October, State Bank of Pakistan has released its Annual Report on The State of Pakistan’s Economy for the fiscal year 2018-19 today. According to the report, several policy measures were taken during the year to manage the twin deficits crisis. In particular, adjustment of exchange rate to market fundamentals, curtailment in public sector development expenditure, and increase in energy prices helped contain demand pressures, leading to a welcome reduction in the current account deficit. In this process, however, the large-scale manufacturing sector faced contraction and inflation increased. SBP continued to maintain tight monetary conditions to manage demand and anchor inflation expectations. The SBP’s Monetary Policy Committee (MPC) increased the policy rate in all six decisions during the year, by a cumulative 575 bps.