According to reports, Pakistan’s current account witnessed an increase of $900 million during the first nine months of the current fiscal year (FY) 2020-21.
The State Bank of Pakistan (SBP) released new data that shows a surplus of $959 million from July to March 2020-21. The surplus is big in comparison to the account deficit of $4.1 billion in the last fiscal year 2019-20.
In March 2021, the current account also witnessed a slight deficit of $47 million. The reason for the deficit is huge import bills that stood at $5.22 billion. The import bill of services remained controlled at $628 million.
On the other hand, the exports of goods and services also stood high at $2.64 billion and $564 million in March 2021.
The remittances and strong support of overseas Pakistanis also exhibited a phenomenal contribution with record inflows of $2.72 billion.
From July to March, the trade deficit of goods and services stood at $20.01 billion, which is seven per cent higher than the previous fiscal year.
On the other hand, remittances witnessed a surplus of 26.2% or $4.4 billion. High remittances are one of the core reasons for the increase in the current account.
According to experts, with almost three months left in the closing of the current financial year, the current account would likely remain in surplus.
In addition to the inflow of foreign exchange, the financial support from the International Monetary Fund (IMF) and Euro Bonds also made the external account comfortable despite the fact that several debt repayments are pending.
The value of the Rupee is volatile against the Dollar, but it remains within a range-bound limit, thereby favorable to the economy.