KARACHI: The country’s current account deficit shrank by 19 percent during the first two months of this fiscal year (FY23) due to lower import bill and increase in exports. The State Bank of Pakistan (SBP) Wednesday night reported that cumulatively the country recorded a current account deficit amounting to $1.92 billion in Jul-Aug of FY23 compared to $2.374 billion in the same period of last fiscal year, depicting a decline of $ 456 million.

The decline in the current account deficit is due to an 11 percent surge in exports and some 2 percent contraction in import bill, the SBP said.

Month-on-month basis, the current account fell by 42 percent or $512 million to $703 million in August 2022 compared to $1.2 billion in July 2022.

The State Bank has taken a number of measures to curtail the import bill to reduce the pressure on external account and maintain the foreign exchange reserves.

During the first two months of this fiscal year, imports recorded a decline of $240 million to $11.98 billion. However, exports posted an increase of $519 million to $5.093 billion in 2 months.

The country is facing a serious cash crisis and making efforts to build the sliding foreign exchange reserves. Pakistan has recently received some $1 billion inflows from the IMF as tranche of Extended Fund Facility. In addition, China has rescheduled a $2.5 billion soft loan.

On September 18, the Saudi Fund for Development (SFD) confirmed the rollover of $3 billion deposits with Pakistan for another one year. The amount was deposited by the SFD for one year in December 2021 under an agreement between SFD and the State Bank of Pakistan to build Pakistan’s depleting foreign exchange reserves.