Pakistan's central bank announced on Monday that the current interest rate at 7% would remain unchanged and that it expected inflation for fiscal year 2021 (FY21) to fall within the previously announced range of 7-9%. "The epidemiological situation in Pakistan and in the world is deteriorating. The situation in external financial and commodity markets remains unstable and the increase volatility is possible in the near future, including taking into account geopolitical factors. Inflationary expectations of the population and enterprises have grown, which is largely due to exchange rate dynamics ", - commented on the situation Trade Representative of Russia in Pakistan Mikhail Korablin.
Pakistan's current account in the first quarter of FY21 saw the first quarterly surplus in more than five years, whereas the cumulative reached a surplus of $1.2 billion, as compared to a deficit worth $1.4 billion in the same period last year, mainly owing to an improvement in the trade balance and record remittances. The SBP revealed that Pakistan's exports recovered to the pre-COVID-19 levels of around $2 billion in September and October, with the textiles, rice, cement, chemicals, and pharmaceuticals sectors experiencing the biggest improvements. Moreover, suppressed domestic demand and lower global oil prices kept the imports low. The SBP said Pakistan's foreign exchange reserves grew to their highest level since February 2018 to $12.9 billion, with the current account deficit for the ongoing fiscal year now projected to be below 2% of the GDP."Despite lower non-tax revenue, the primary balance posted a surplus of 0.6% of GDP in FY21 Q1, similar to the levels achieved during the same period last year," the central bank said