Foreign Currency Deposits remain gloomy in January

February 16, 2021 (MLN): Foreign Currency Deposits during the month of January 2021 stood at $7.8 billion, depicting an increase of 3%YoY.

While on a month-on-month basis, it remained flat, shows recently released SBP data on foreign currency deposits and its utilizations.

The constant dull growth in foreign currency deposits is simply linked with a drop in the value of the US dollar against the local currency (Rupee), as it indicates that Rupee-based accounts offer massive returns due to which investors become reluctant to convert their savings into dollar deposits.

According to the data issued by SBP, foreign currency deposits by Residents stood at $6.875 billion during the month under review which was almost the same as the deposits reported in the previous month as well as in the same month of last year.

As these deposits help to finance large fiscal and external current account deficits, during the month $268 million has been utilized to finance the country’s exports whereas, $408 million has been utilized for import financing.

Further, $1.168 billion has been placed with SBP, while $74 million and $980 million placed within Pakistani banks and outside Pakistan respectively.

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