Foreign currency deposits remain dismal in March

April 16, 2021 (MLN): Foreign Currency Deposits during the month of March 2021 stood at $7.8billion, depicting an increase of 4.3%YoY.

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

The lacklustre growth in foreign currency deposits is mainly associated with the stability of local currency 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 $6.9bn during the month under review which was almost the same as the deposits reported in the previous month. However, on a YoY basis, the data reported 3.8% increase compared to the same month of last year.

As these deposits help to finance large fiscal and external current account deficits, during the month $273million has been utilized to finance the country’s exports whereas, $436mn has been utilized for import financing.

Further, $1.195bn has been placed with SBP, while $79mn and $1,034mn placed within Pakistani banks and outside Pakistan respectively.

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