[01] Farooq Azam, Hailey College of Commerce, Faculty of Commerce, University of the Punjab, Lahore, Pakistan. [02] Samreez Safdar, Hailey College of Commerce, Faculty of Commerce, University of the Punjab, Lahore, Pakistan. [03] Muhammad Saad Liaquat, Department of Accountancy, University of London, London, England.

The Current account deficit was the highest in the FY 18 compared to FY 17. In the FY 18, the CAD was around 6.3% whereas the CAD in FY 17 was around 4.3%. The exchange rate within Pakistan was declining continuously and the cumulative exchange rate decline was having growth of around 13.6% between July 2018 and March 2019. The value of Rupee against dollar was around 3.2% and the amount was close to Rs.146.52 a dollar in March 2019 and Rs.159 a dollar in July 2019 which made the situation worse. 1% further devaluation means the national debt climbs by Rs. 125 billion. In Pakistan, industries are heavily dependent on imported raw materials for industrial goods, capital goods and components, however, quotas and tariffs block their access to advanced countries. A rise in the price of any component through currency devaluation increases the cost of imports. The exports have not increased to the required level due to decline in industrial base and conversion of economy to a consumer based import economy. Pakistan is occupied by 70% of deserts and this is acting as another factor behind the lack of growth within the economy.

Foreign Direct Investment (FDI), Current Account Deficit (CAD), Exchange Rate, Devaluation, Fiscal Policy, Balance of Payment (BOP), Dollar Reserve

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