In line with market expectation, Pakistan’s current account balance - the difference between government’s foreign income and expenditure - recorded a deficit of $662 million in December 2020 after remaining in surplus for a record period of five months (July-November) of current fiscal year 2020-21.
Rupee likely to stay stable, gold may fall
Currency may lose 2-4% over the year; with availability of vaccines gold unlikely to hit new highs
Pakistan’s currency is expected to gradually depreciate in the range of 2-4% to around Rs164-66 to a dollar over the next one year as the gap between demand and supply of foreign currency will remain narrow during the year of economic revival, ie 2021.
The expected receipt of International Monetary Fund (IMF) loan tranches, launch of Eurobond and Sukuk to raise financing in international markets, new financing from other global financial institutions, improvement in workers’ remittances and a nominal deficit in the current account balance altogether will support the rupee to stay firm during 2021.
Current account makes new record
Remains in surplus for fifth successive month at $447 million
Despite the wide current account gap, the SBP s foreign currency reserves increased to $16.4 billion in May 2017 compared to $16.1 billion in April 2017 mainly due to a surge in fresh short and long-term loans. PHOTO: REUTERS
Pakistan’s economy has continued to make and break historic records during the Covid-19 pandemic. Its current account balance stayed in surplus - meaning government’s foreign income exceeds its expenditures - for the fifth successive month in November at $447 million.
The development partially helped the country’s foreign currency reserves stay near a three-year high above $13 billion.
Pakistan sees outflow of $16m in November
FDI turns negative after two years as power, telecom firms transfer funds abroad
PHOTO: AFP
After receiving back-to-back good news on the economic front during the Covid-19 pandemic, Pakistan has been hit by grim news as net foreign investment turned negative at $16 million in November 2020.
Foreign direct investment (FDI) has become negative after a gap of two years after power and telecom firms operating in Pakistan apparently transferred funds to their parent companies in China and Norway respectively.
Short-term investors were, however, seen again making small investments in the government debt securities like treasury bills and Pakistan Investment Bonds (PIBs) in November.
RDA may attract $1.5b in 6 months
Non-resident Pakistanis deposited largest amount of $7.7m in a day on Wednesday
Liquid foreign currency reserves held by the country stood at $20,402.4 million.. PHOTO: FILE
The Roshan Digital Account (RDA) initiative, which provides overseas Pakistanis with investment opportunities in areas like saving certificates, stock market and property, is expected to attract $1-1.5 billion over the next six months and build the country’s foreign currency reserves.
The State Bank of Pakistan (SBP) reported that non-resident citizens deposited the largest amount of $7.7 million in a day on Wednesday in their RDA at banks operating in Pakistan. With this, their total deposits grew to $139.4 million in the past three months. Prime Minister Imran Khan had launched the initiative in September 2020. Over 50,000 overseas Pakistanis have so far opened the accounts in eight Shariah-compliant and conventional banks.