KARACHI, July 16: Pakistan received record remittances of about $6.5 billion during 2007-08 from overseas workers enabling the country to meet at least 50 per cent of the current account deficit.

The State Bank of Pakistan on Wednesday reported an inflow of $6.451 billion as workers’ remittances, which was 17.4 per cent higher than the preceding year, an addition of $957 million recorded this year.

Analysts termed the 2007-08 as the difficult year, which received unprecedented help from the overseas Pakistanis to meet 50 per cent of current account deficit touching $12.9 billion in first 11 months of the previous year.

“The expected current account deficit is $14.5 to 15 billion for the year 2007-8, which means the remittances were 45 per cent of the entire current account deficit,” said Mohammad Imran, research head at First Capital Equities.

The present government is now facing serious challenges to meet the widening current account deficits with rising oil prices in the world market.

Analysts said the year 2008-09 was more crucial for the country as the foreign exchange reserves were depleting fast while the oil import bill is soaring to unlimited level.

“If the Saudi government provides the oil facility, it would significantly reduce the massive burden of foreign exchange payment on the country,” said Atif Ali, another analyst.

The Saudi government has reportedly promised to provide oil worth $5.9 billion with the condition of deferred payment, which means the payments could be made later.

The Saudi government had been providing oil facility on deferred payments since 1999 and each time the amount was written off.

This may not be the situation again as the two governments are busy in finalising details and modalities for the payment of reported $5.9 billion oil facilities.

Analysts said the government requires cutting import bill like import of $1 billion of mobile phones as well as import of luxurious cars and bullet-proof vehicles, which consumes substantial amount of precious foreign exchange reserves.

The currency dealers also showed their concern over the shrinking foreign exchange reserves of State Bank, which, as they say, was the main reason for heavy deprecation of rupee against the dollar.

The SBP’s foreign exchange reserves were slashed by $4.5 billion since the beginning of the new calendar year while the rupee lost 15 per cent value against the dollar.

The SBP took a series of actions to strengthen the rupee-dollar parity but after a short-time recovery, the dollar has started putting pressure on rupee again.