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Packs of freshly printed 20 USD notes are processed for bundling and packaging at the US Treasury's Bureau of Engraving and Printing in Washington, DC July 20, 2018. — AFP
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KARACHI: The current account of Pakistan collapsed in May, which changed the small surplus posted last month as high imports meet the increase in remittances.
Data released by the State Bank of Pakistan said Tuesday that the current account was converted to 3 103 million deficit in May in May. In May 2024, the country reported a decline of $ 235 million.
Unlike a $ 1.6 billion deficit in the same period last year, Pakistan recorded an additional record of $ 1.8 billion in the current account during the 11 months of the fiscal year ended in June. The director of AKD Securities Limited’s Research Director said that imports into the current account, increasing high interest payment, increasing high interest payment, increased high interest payment.
Ashraf added, “However, the increase in the remittances of the labor has offered some relief.
Exports have declined by $ 6.430 billion in monthly month (mother) and 19 % year -on -year (YOY). However, from July 25 to May, exports increased to $ 29.691 billion, representing a 4 % increase over the same period last year.
Remittances from citizens working abroad to Pakistan increased to $ 68 3.686 billion, which increased by 16 percent over the previous month and 14 percent compared to the same month last year. In the first 11 months of this fiscal year, remittances increased by 29 %, which reached $ 34.891 billion.
This balance of payments data was made by SBP on Monday after 11 % changing its key interest rate. The bank has raised concerns about the risk of rising inflation during increasing geographical political tensions. It noted that the dispute between Israel and Iran increases Pakistan’s inflation and uncertainty in the outskirts of the external sector. The SBP’s Monetary Policy Committee (MPC) mentioned in its later meeting statement that when imports continue to increase with improving economic activity, export growth has decreased, partially difficult due to the global trade environment.
The SBP has predicted that the current account will remain additional in the financial year 2025. However, due to the global trade environment and the strong demand for imports, the current account is expected to turn into a moderate deficit in the financial year 2026. So far, despite weak financial support, SBP has increased by almost Engant 14 that its foreign exchange reserves will increase to $ 14.
He said that the external approach is of many risks, which are mainly caused by geographical political tensions, fluctuations in international oil prices, the potential negative effects of the proposed budget measures and a potential reduction in the expected financial influx.
Analysts suggest that if the SBP is expected to receive a $ 1.4 billion climate, and if the Ministry of Finance is able to borrow $ 2 billion from the Middle East banks, the SBP will meet its Forex Reserve target. Pakistan plans to pay some of the $ 500 million eurobond in September.
In a briefing following the recent rate of cuts, Central Bank Governor Jamil Ahmed informed analysts that the total payment of FY 25 is $ 25.8 billion, most of which have already been paid or eliminated. The remaining millions are 400 million are scheduled within the next two weeks, with some arrival this month. Waiting for the financial year 26, the governor indicated that external loans are expected to be almost the same. More details will be provided at the next MPC meeting at the end of next month. The governor is expected to reach $ 38 billion for the financial year 25, which has increased by $ 31.3 billion in the previous year.
