January 13, 2021 (MLN): Foreign Currency Deposits during the month of December 2020 stood at $7.821 billion, depicting an increase of 2%YoY.
While on a month-on-month basis, it remained flat, 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 issued by SBP, foreign currency deposits by Residents stood at $6.877 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 $280 million has been utilized to finance the country’s exports whereas, $397 million has been utilized for import financing.
Further, $1.257 billion has been placed with SBP, while $69 million and $866 million placed within Pakistani banks and outside Pakistan respectively.
