Current account deficit shrinks to $98 million in August as remittances hit $3.66bn

Pakistan's current account deficit fell to $98 million in August 2026, down from $445 million in July and $324 million in August 2025, according to State Bank data reported on 16 September. The swing came mostly from money sent home by Pakistanis working abroad.

For the first two months of FY2026-27 (July and August), the deficit was $543 million, 36% smaller than the $853 million of the same period last year.

The numbers

Imports grew faster than exports, so the trade gap widened to about $3.3 billion. Remittances covered almost all of it.

Foreign exchange reserves stood at $17.28 billion, about 19% higher than a year earlier, Business Recorder and Pakistan Observer reported. The real effective exchange rate (REER) was 107.92 in August against 107.89 in July. A reading above 100 means the rupee is somewhat overvalued against trading partners' currencies, which makes imports cheaper and exports harder to sell.

Why it matters to you

A small current account deficit means Pakistan needs less new borrowing to pay its import bills. That is what has kept the rupee steady: it closed at Rs 277.27 to the dollar on Wednesday, barely changed for weeks. A stable rupee limits how much of the global oil shock reaches your fuel and electricity bills.

The risk is in the imports line. With Brent crude above $100 a barrel and petrol now Rs 384.34 a litre, September's oil bill will be heavier than August's. If remittances do not keep pace, the deficit can widen quickly.

Who is keeping the account afloat

Remittances rose 17% on the year to $3.66 billion in August, more than the $3.33 billion Pakistan earned from all its exports that month. Families in Lahore, Karachi, Sialkot or a Swat village receiving that money are, in effect, financing the country's imports.

If you receive money from abroad:

1. Compare the rate your bank or exchange company gives against the interbank rate on our dollar rate page, or the riyal and dirham pages.
2. Use legal channels: banks and licensed exchange companies. Hundi and hawala are illegal and leave you with no recourse if money goes missing.
3. Convert amounts with our currency converter.

What to watch next

• September oil import bill, published by the Pakistan Bureau of Statistics early next month.
• The US Fed decision tonight at 11pm Pakistan time. A stronger dollar can pressure the rupee even with a small deficit. See our market wrap for 16 September.
• SBP's next policy meeting. The State Bank held its rate at 11.5% on 11 September; a steady external account gives it more room.