On Monday, US dollar has touched its all time high selling at 90, and one of the main reasons conducive for Pakistani Rupee depreciation is widening current account deficit. That made the PKR depreciate sharply after hitting a 116-day low of PKR 90 per US dollar in interbank on December 19. On December 16 rupee posted a slight rebound to 89.565. Rupee has seen more volatility since the start of December 2011, primarily owing to liquidity shortage and secondly as concerns over Pak-US ties intensified. Over the period PKR has shredded almost 4.2 per cent FY12TD while on annual comparison this translates into 9.5 per cent depreciation. PKR likely to reach 91.6/USD : Saad Khan at AHL said that in coming weeks we expect PKR to broadly remain stable after a recent boost in FX reserves of $10 million, allowing the total reserves to reach its $16.69 billion mark.
FY12 c/a deficit forecasts to USD3.3bn: He further said we expect a sharp downward adjustment in the c/a deficit in FY12. Our revise estimate suggests c/a deficit likely to reach $3.3 billion by FY12-end or 1.4 per cent of total GDP. This in our view is likely to come on the back of sluggish export growth of five per cent YoY to $26 billion, due to lower commodity prices but also due to the noticeable slowdown in energy constraints.
While our import projections remain on the higher side at $41.1 billion (15per cent YoY) owing high energy based consumption. Incorporating these changes we estimate the trade deficit likely to hover around $14.7 billion against $10.5 billion in FY11, he added. Imports drop to lowest during the 5MFY12: The latest balance of payments data for the period 5MFY12 pointed to a current account (c/a) deficit of $2.1billion, against $478million corresponding period last year. However, interestingly the break-up of current pattern of deficits reveals that it is not based on rising import bill, which for the month stood at $2.99 billion, down by seven per cent MoM. The overall energy based import still showed a handsome growth of eight per cent MoM (two per cent YoY).
