Current account records surplus of $258 million

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KARACHI: Pakistanís current account recorded a surplus of $258 million in the first four months of the current fiscal year as against a deficit of $1.655 billion during the same period last year, according to the central bank on Monday. An improvement in the services account and robust growth in workersí remittances were major drivers for the surplus in the current account during the July-October period.

Analysts said that although the situation is currently under control, a steady erosion of foreign exchange reserves on account of foreign debt servicing obligations will put pressure on the balance of payments position in the coming months.

Despite the fact that Pakistanís economy has run the modest surplus in its current account for July-August and July-September respectively, the overall balance of payments position remains alarming due to high external debt repayments. The overall balance of payments stood at negative $470 million during the period under review.

Pakistan has to repay nearly SDR 399.59 million, or $614.67 million to the International Monetary Fund (IMF) during November under the head of regular charges, standby arrangement obligations, extended credit facility and SDR Department charges.

Pakistan is set to make a repayment of around $394 million to the IMF against the standby arrangement on November 23.During this month, foreign exchange reserves have gone down by $488 million, while the reserves held by the State Bank have been reduced by $564 million.

Total reserves stood at $13.845 billion during the week ended November 9, whereas the official reserves of the central bank slumped to $9.242 billion.The current account witnessed a deficit of $177 million during October, said the SBP.

The current account during July-October stood at 0.3 percent of GDP as compared to a deficit equal to a negative 2.1 percent of the GDP in the same period of the preceding year.According to the data, the trade balance remained in the negative zone as it amounted to $5 billion during the first four months of the current fiscal year as compared to $5.398 billion in July-October FY13.

During the July-October period, the services account accumulated a surplus of $2.564 billion as compared to $1.671 billion in the same period last year.Total exports stood at $8.21 billion against $8.10 billion, while imports reached $13.21 billion against $13.50 billion during the corresponding period a year ago.

A mixed trend was witnessed in the capital and the financial accounts of the country as the capital account rose to $40 million, while the financial account remained negative and stood at $344 million during the period under review.

Courtesy: The News

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