KARACHI: Despite odd situation on both economic and political fronts, the inflow of foreign direct investment in February increased by 10 per cent but the overall eight months’ inflows fell by over 40 per cent.
The data released by State Bank of Pakistan on Monday shows that the FDI during February was $100.9 million compared to $90.8m during the same month of last year. The FDI has been declining since the beginning of the current financial year mainly on account economic vulnerability and political uncertainties.
China was on the top of the list since the inflow from the country was the highest with $22.7m last month. The data shows that during July-Feb FY23, the inflows of FDI from China were $222.8m, which was the highest inflow from any one country; however, the Chinese inflows were less than last year’s $366m.
Other two significant inflows were from Japan ($134m) and Switzerland with $123m. During the eight months of the current fiscal FY23, the total FDI inflows were $784.4m against $1315m in the same period of last year; a decline of 40.4pc.
Pakistani rupee has been struggling against the US dollar to remain within current range of Rs280, but the mounting demand and poor foreign exchange reserves is causing rupee deprecation.
On Monday, the Pakistani rupee depreciated by Rs2.32 per dollar which was significantly high since the price is already at the optimum point. The SBP reported that the closing price of dollar was Rs284.03 in the inter-bank market compared to Rs281.71 in the last session held on March 17.
Currency dealers expecting more depreciation since the Pakistani rupee is losing its value internationally with the negative reports reaching abroad.
“The PKR has become so devalued that I was getting Rs324 per dollar in Dubai,” said an individual named Saeem, who recently visited the UAE.
Rupee depreciates by Rs2.32 versus dollar
The exchange companies said importers are buying dollars from illegal markets to keep alive their business but, at the same time, their buying is strengthening the illegal dollar trading. The SBP has allowed importers to arrange dollars for their imports. The exchange companies have no capacity for big supply of dollars required to importers.
The open market offered dollar at Rs286 on Monday while they quoted the dollar price as Rs285.50 for the inter-bank market. Exchange companies also trade with banks as they are bound to deposit their surplus dollars in banks each day.