The State Bank of Pakistan's data reveals that in April 2019 the country was subjected to net outflows of foreign currency due to repayment of debt. The current account balance improved from negative $1.24 billion in April 2019 compared to $ 2.27 billion in April 2018 however there was net inflow of $ 1.95 billion in April 2018 compared to a net outflow in April 2019. This is extremely worrisome, so stated Dr Hafiz Pasha while speaking to Business Recorder exclusively.
In April 2019 the government paid $1.694 billion for retiring debt including $1 billion Sukuk and in November another $1 billion Sukuk would be maturing. In effect Pakistan lost this massive amount in just one month. The comparable figure for April 2018 is $ 223 million.
The rise in foreign remittances is buffering up the reserves and rose from $ 1.6 billion in April 2018 to $ 1.78 billion in April 2019. This rise in remittances was also reflected globally with as per the World Bank "the top remittance recipients were India with $79 billion, followed by China ($67 billion), Mexico ($36 billion), the Philippines ($34 billion), and Egypt ($29 billion)."
Dilip Ratha, of the World Bank stated that "Remittances are on track to become the largest source of external financing in developing countries. The high costs of money transfers reduce the benefits of migration. Renegotiating exclusive partnerships and letting new players operate through national post offices, banks, and telecommunications companies will increase competition and lower remittance prices."
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