Foreign currency deposits inches up by 0.7% MoM in December

January 17, 2024 (MLN): Foreign currency deposits during the month of December 2023 stood at $6.38 billion, depicting an increase of 0.71% MoM, data issued by the State Bank of Pakistan showed on Tuesday.

While on a year-on-year basis, it fell by 1.36% YoY, shows recently released SBP data on foreign currency deposits and its utilizations.

The dreary 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, foreign currency deposits by residents stood at $5.57bn during the month under review which was 0.68% MoM higher as the deposits reported in the previous month stood at $5.53bn.

While compared to same month of last year, it fell by 1.57% YoY compared to deposits of $5.66bn.

As these deposits help to finance large fiscal and external current account deficits, during the month $450 million was utilized to finance the country’s exports whereas, $1.49bn was utilized for import financing.

Further, $1.03bn was placed with SBP, while $91m and $538m were placed within Pakistani banks and outside Pakistan respectively.

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