The figures provided by the State Bank of Pakistan, the forex reserve dropped by a massive $302.9 million to reach $7.596 billion. Similarly, the net reserves that commercial banks held decreased by $39 million, bringing the total down from $5.68 billion to $5.64 billion.
This decrease was entirely attributed to external debt repayments, which included repayment of a commercial loan and interest payment on Eurobonds.
Pakistan requested a bailout to prevent a total financial collapse and restore its reserves. As the money began to come in. It was later struck by catastrophic floods that swamped about a third of the country, making the already precarious financial situation worse. Moreover, many Asian countries’ foreign reserves have fallen to multi-year lows after a rise in the value of assets caused by an increase in the dollar value.
In August, Pakistan successfully bid to obtain a loan of $1.1 billion from the International Monetary Fund (IMF). However, money from the World Bank and the Asian Development Bank (ADB) has not yet been received. In addition, about $5 billion in investment commitments from Arab nations will materialize primarily next year.
In the meantime, authorities have placed restrictions and are delaying import payments to protect the diminishing reserves hindering the country’s economic activity. As a result, the Pakistan Bureau of Statistics stated earlier this month that the country’s trade deficit for the first quarter of the fiscal year 2023 decreased by 21.42 percent annually.
According to PBS’s preliminary data on monthly trade statistics, the trade deficit for the first quarter of (July-September) was $9.2 billion. Compared to the $11.7 billion deficit recorded during FY22, this is a significant decrease of 21.42 percent.
The total value of imports for the first quarter was $16.3 billion, compared to $18.71 billion last year. Comparatively, exports marginally increased to $7.1 billion from $6.99 billion in the previous year’s first quarter.
Pakistan’s trade deficit increased by a staggering 55.7% in 2022, bringing the total import-export imbalance to $48.38 billion.
