Daily Times

According to figures provided by the State Bank of Pakistan (SBP) on Saturday, Pakistan’s current account deficit was $1.03 billion in March 2022, compared to $369 million in the same period the previous year.

Figures from the SBP show that the current account deficit in February 2022 was $519 million. Because of this, the current account deficit in March 2022 is 98 percent greater than it was in the previous month.

“Despite high global commodity prices, the turnaround in the current account continues, with a deficit of $1b in Mar, $500mn lower than the average during FY22. Moreover, the non-oil balance remained in surplus for the 2nd consecutive month,” the SBP tweeted.

There was a current account deficit of $13.17 billion in the nine months of FY22 compared to $275 million in the same period of the previous fiscal year (FY21), according to SBP data.

Pakistan’s economy relies heavily on the country’s current account balance. As the current account deficit widens, dollars leave the country, putting pressure on the currency, which has fallen to near the 187 level in the interbank market.

Pakistan’s import bill rose to $6.244 billion in March, up from $5.143 billion in February, as the country’s imports continued to rise.

Despite this, Pakistan exported $3.072 billion worth of commodities in March, an increase from February’s $2.888 billion. Meanwhile, remittances totaled $2.81 billion in March 2022, up 3pc year over year and 28pc month over month.

Successful renewal of the $6 billion Extended Fund Facility (EFF) of the International Monetary Fund (IMF) would allow for an influx of at least $1 billion at a time when the country is struggling to increase its foreign exchange reserves.

There will be a rollover of Chinese debts as well. Despite this, SBP’s foreign exchange reserves have fallen to a critical level of less than $11 billion due to upcoming negotiations.