According to State Bank of Pakistan, "although the full impact of recent exchange rate depreciations on exports and imports is going to unfold gradually in the coming months, financing of the high current account deficit is challenging as a healthy growth in FDI and higher official inflows were insufficient to finance it completely. Consequently, SBP's foreign exchange reserves declined to USD 11.78 billion as of 22nd March 2018. Going forward, along with a focus on narrowing the current account gap, government's plans to timely mobilize external inflows, both official and commercial, will play a pivotal role in maintaining adequate level of SBP's foreign exchange reserves and anchoring sentiments in the FX markets."
The SBP's Monetary Policy Statement says it all. Foreign exchange reserves are under tremendous pressure while current account deficit is widening. The government must pay heed to SBP's advice before it is too late.
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