KARACHI, Jan 16: Pakistan earned a current account surplus of $994 million in the first five months of this fiscal year — thanks largely to a higher home remittances and a $600 million US aid.

Government sources said that the country booked $994 million current account surplus during July-November 2001 as home remittances jumped to $789 million: In July-November 2000 Pakistan had seen a current account deficit of $437 million with home remittances at $535 million.

The situation took a turn for the better in October-November when home remittances started rising after the September 11 attack on the US followed by strict checks introduced across the world against money laundering.

The checks prompted many Pakistanis abroad to transfer money from their overseas accounts back home. This boosted the rupee and contracted the spread between the inter-bank and open market exchange rates thereby encouraging overseas Pakistani workers to send more money through official channels. The net result was a huge rise in home remittances: In October alone home remittances rose to $185 million from just $81 million in October 2000 and in November the monthly remittances shot up to $260 million against $73 million in November 2000.

Government officials say what else helped the country record a current account surplus in the first five months of this fiscal year was a $600 million US aid.

The US gave this amount in November last to reward Pakistan for being a front-line state in its “war against terrorism in Afghanistan.” This more than doubled the official transfers to $884 million in July-November 2001 from $423 million in a year-ago period.

Officials say narrowing of trade and services deficits also paved the way for a current account surplus: Trade deficit fell to $87 million only against the corresponding figure of $774 million and services deficit came down to $1.2 billion from $1.3 billion. The narrowing of trade deficit was no mean feast as exporters had a tough time in fetching orders from foreign buyers after September 11. Meanwhile a slump in world petroleum prices also reduced the import bill.

A slightly higher dollar buying from the open market by the State Bank also led to current account surplus: SBP bought $517 million during July-November 2001 up from $491 million in July- November 2000.