Following a ban on nonessential goods, Pakistan’s imports dropped over a third this July, according to Finance Minister Miftah Ismail. He said in a Sunday news conference that the improvement Pakistan's in trade situation will take the pressure off the rupee.
The country saw a decrease in imports in July, to $5 billion, which is more than 35% below June’s record high, $7.7 billion. Latest data for the month of July is about to be announced soon by the central bank and Pakistan Bureau of Statistics (PBS).
Saying “this is very welcome,” Ismail added that this follows the government’s attempt to ban imports of nonessential goods.
On Friday, the rupee traded up marginally at 239.37 to the dollar. Last week, the nonessentials import ban was removed, and only vehicles, mobile phones and household appliances are still prohibited.
According to Ismail, the present government has been determined to dramatically lower the Current Account Deficit (CAD) and see a surplus in one or two years. Pakistan’s foreign exchange reserves are increasingly exhausted. The country has been challenged by a swelling current account deficit, with a $2.3 billion increase in June, which basically stemmed from a growth in oil imports.
The deficit for June 30 – the end of financial year – reached $17.4 billion compared to $2.8 billion a year earlier.
A staff-level agreement was reached with the IMF for $1.17 billion paid under a bailout package which has been resumed again.