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High imports, trade deficit pull forex reserves down

They decreased by $169m in a week

SAMAA | - Posted: Jan 7, 2022 | Last Updated: 2 weeks ago
SAMAA |
Posted: Jan 7, 2022 | Last Updated: 2 weeks ago
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The foreign exchange reserves held by the State Bank of Pakistan went down by $169 million during the week ending on December 31. This brings the total reserves with the central bank to $17.68 billion. Data shared by the central bank on Thursday showed that the foreign exchange reserves held by the SBP stood at $17.68 billion, while reserves held by commercial banks decreased to $6.33 billion, bringing the cumulative forex reserves to $24.01 billion. The biggest reason for the decline in foreign exchange reserves is increasing imports which reached $40.8 billion during the first half (July-December) of the current fiscal year 2021-22. They brought the trade deficit to a historic high of $25.5 billion. Exporters asked to bring export proceeds within 120 days The central bank on Wednesday directed exporters to bring proceeds within 120 days from the date of shipment to improve foreign currency inflows in the market. Earlier, the exporters were required to bring their export proceeds within a maximum period of 180 days. “With an objective to improve the timely inflow of foreign exchange from exports proceeds in the market, SBP has amended foreign exchange regulations requiring exporters to bring export proceeds within a maximum period of 120 days from date of shipment,” a statement by the bank said. “The new measure is expected to positively impact foreign exchange inflows in the market,” it added.
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The foreign exchange reserves held by the State Bank of Pakistan went down by $169 million during the week ending on December 31. This brings the total reserves with the central bank to $17.68 billion.

Data shared by the central bank on Thursday showed that the foreign exchange reserves held by the SBP stood at $17.68 billion, while reserves held by commercial banks decreased to $6.33 billion, bringing the cumulative forex reserves to $24.01 billion.

The biggest reason for the decline in foreign exchange reserves is increasing imports which reached $40.8 billion during the first half (July-December) of the current fiscal year 2021-22.

They brought the trade deficit to a historic high of $25.5 billion.

Exporters asked to bring export proceeds within 120 days

The central bank on Wednesday directed exporters to bring proceeds within 120 days from the date of shipment to improve foreign currency inflows in the market.

Earlier, the exporters were required to bring their export proceeds within a maximum period of 180 days.

“With an objective to improve the timely inflow of foreign exchange from exports proceeds in the market, SBP has amended foreign exchange regulations requiring exporters to bring export proceeds within a maximum period of 120 days from date of shipment,” a statement by the bank said.

“The new measure is expected to positively impact foreign exchange inflows in the market,” it added.

 
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