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External account stands in surplus at $5.7bn
KARACHI: The external account performance remained strong as it posted $5.7 billion surplus in the financial year 2013-14.
After many years in the history of the country, the higher foreign private investment primarily from the proceeds of Eurobond issue has turned the financial account positive to $4.5 billion from deficit of $75 million during same period last year. Strong capital inflows from bilateral and multilateral sources further helped capital account surplus.
The net foreign investment, both direct and portfolio has posted sharp increase during the period of July to May as direct investment surged by 16 percent YoY to $1.25 billion while portfolio inflows have witnessed handsome growth to reach $2.32 billion after the issuance of Eurobond.
The increase in Foreign Direct Investment is primarily explained by proceeds from bilateral and multilateral sources and foreign loans.
Analysts said the external account strengthening to sustain under the umbrella of International Monetary Fund (IMF) Standby arrangement programme, privatisation programme, loans from World Bank (WB), Asian Development Bank (ADB) and other bilateral and multilateral sources, the country’s foreign currency reserves stand at $14 billion, up 27 percent so far at the closing of the outgoing financial year.
The external account strengthening seemed sustainable under the umbrella of IMF standby arrangement programme worth $6.7 billion, privatisation programme, 3G-spectrum auction, loan from WB, ADB and other bilateral and multilateral sources.
Courtesy www.dailytimes.com.pk