ISLAMABAD – In a ‘great news on economy’, the country’s current account for the fifth consecutive month rose to $447 million in November this year.
In November 2020, the current account surplus rose further to $447 million against a deficit of $326 million in November 2019. So far in five months (July to November) of the current fiscal year, the current account surplus has reached $1.6 billion compared to a deficit of $1.7 billion over the same period last year, according to the State Bank of Pakistan (SBP).
Prime Minister Imran Khan has also shared the news of current account surplus on twitter. He said, “Despite Covid 19 great news on economy- remarkable turnaround.” Current account surplus again in Nov is $447 million for fiscal year so far, surplus is $1.6 billion as opposed to deficit of $1.7 billon same period last year. SBP’s FX reserves have risen to about $13 billion, highest in 3 years, he added.
In five months of current fiscal year, current account surplus has reached $1.6 billion compared to deficit of $1.7 billion over same period last year
This is the fifth consecutive month the country has seen a current account surplus. “In contrast to previous 5years, current account has been in surplus throughout FY21 due to an improved trade balance and a sustained increase in remittances,” said SBP on twitter. In Nov-20, both exports and imports picked up, reflecting recovery in external demand and domestic economic activity, it added. This turnaround in the current account, together with improvement in financial inflows, raised SBP’s FX reserves by around $1 billion in November 2020. At $13.1 billion, they are now at their highest level in 3 years, the SBP maintained.
The current account is in surplus mainly due to the massive increase in inflow of foreign remittances. Pakistan had created history with over $2 billion worth of workers’ remittances for the sixth consecutive month in November, which helped the country to continue to meet its international payment obligations. The remittances rose to $2.34 billion, up 2.4% over the previous month and 28.4% over November 2019. Cumulatively, in the first five months (July-November) of current fiscal year, remittances grew 27% to $11.77 billion compared to the same period of last year, revealed figures released by the central bank.
The ministry of finance in its recent report stated that based on current information, no significant deterioration in the balance of trade in goods and services is expected. Also, the inflow of workers’ remittances remains strong. Therefore, the recovery may preserve external balance. External balance implies the prospect for a stable exchange rate in the near term, which may contribute, in addition to specific government measures to reduce inflationary pressure.
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