ISLAMABAD – State Bank governor Tariq Bajwa said unlike countries with hugereserves following fixed or those with pegged and floating exchange rates,Pakistan had been following a graduated approach — intervening at times tosupport exchange rate and making adjustments occasionally.

“We have been doing both things.” The SBP kept exchange rate unchanged forquite a long time but since December 2017 has made six adjustments as itsreserves dropped from $18bn to about $7.5bn.

According to Bajwa, Pakistan’s current account deficit was a truereflection of the $36bn trade gap (imports at about $60bn while exports at$24.5bn), which was partly financed by $18-19bn remittances in the absenceof any major support in the form of foreign direct investments.

He said the results of current adjustments, jointly made by SBP and thegovernment, have started to show results as the imports dropped from a 24pcgrowth in FY18 to 0.7pc decline this year while exports have risen by 4pc.He said the policy objective at this stage was to ensure stabilisation andgrowth and the government was also working on incentives to attract higherremittances.