KARACHI: Current account deficit (CAD) dropped to $ 0.2 billion in January 2023, down 90 percent from last year as rupee’s depreciation slowed down imports, central bank said.

In less than month, cash-strapped nation’s currency has lost more than quarter of its value against US dollar after removal of artificial caps and fuel prices have risen by more than fifth as government implemented fiscal measures required to unlocking funds from an International Monetary Fund bailout.

During first seven months of current fiscal year, country’s current account deficit decreased by 67 percent to $ 3.8 billion, compared with deficit of $ 11.6 billion during same period last year.

“This monthly deficit is lowest after 25 months and lower than expectations,” said Muhammad Sohail, CEO of Topline Securities. Sohail, citing falling currency. Weaker currency has made imports more expensive, effectively slashing them.

Tahir Abbas, Head of Research at Arif Habib Limited said that imports under machinery group and transport group have gone down 47 percent and 61 percent respectively was primarily due to stringent administrative measures taken by State Bank of Pakistan in addition to an economic slowdown.

Published in The Daily National Courier, February, 21 2023

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