Current account deficit (CAD) continued to decline for the third consecutive month dropping to US$316mn in Sep 2022 vs. US$676mn in Aug 2022 led by 24% MoM reduction in trade deficit during the month. Trade deficit during Sep 2022 clocked in at US$2.3bn vs. US$3.0bn last month. This improvement in trade numbers was led by 17% MoM drop in imports which declined to US$4.8bn during the month driven by lower oil imports.
Exports during the month were also lower on MoM basis, but drop in imports more than compensated the decline in Exports. Total foreign exchange reserves of the country dropped to US$13.3bn in Sep vs. US$14.3bn last month. Similarly, reserves held by SBP were down by US$1bn to US$7.9bn due to debt repayments and absence of any major inflows. As a result, SBP reserves now equal to 1.6 months of imports in Sep 2022. CPI inflation also improved to 23.2% in Sep 2022 vs. 27.3% primarily due to lower electricity charges.
Courtesy- Topline Securities