Bloomberg, a United States (US) based financial company, revealed that Pakistan’s dollar reserves were depleting rapidly.
As per Bloomberg’s assessment of the International Monetary Fund’s data, Pakistan’s dollar reserves had fallen by about a fifth in the previous year to reach $13.5 billion and were expected to drop to as low as $2.2 billion by June.
According to Insight Securities Pvt, Pakistan’s dollar reserves may end up lesser than those of Cambodia’s, economy of which was 10 times smaller than Pakistan’s economy size.
Pakistan is currently facing a current account deficit with its Balance of Payment (BOP) deficit rising alarmingly to 50 percent in recent months, i.e. $10.8 billion. Previously, the Securities and Exchange Commission devalued the Pakistani rupee for the second time with a short gap of four months as a measure to control the BOP crisis.
As per expert opinion, the issue is that the pace of the exports isn’t rising and with strong competition from Bangladesh especially in the textile market in the international market the economy wasn’t blooming.
According to the Bloomberg report, many Asia Pacific countries have smaller economies than Pakistan’s yet their forex reserves were doubling while Pakistan’s were depleting.
South Asian Director of Albright Stonebridge Group LLC Uzair Younous said that the only solution Pakistan may opt for is by improving its business climate. The foreign direct investment inflows should be encouraged and reforms on exports should be implemented for the country to compete globally.