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- During a fault the remanent flux in a current transformer (CT) may cause severe saturation of its core. The resulting distortion in the secondary current could cause the mal-operation of a protection relay. This paper proposes an algorithm for compensating for the errors in the secondary current caused by CT saturation and the remanent flux. The algorithm compensates the distorted current irrespective of the level of the remanent flux. The second-difference function of the current is used to detect when the CT first starts to saturate. The negative value of the second-difference function at the start of saturation, which corresponds to the magnetizing current, is inserted into the magnetization curve to obtain the core flux at the instant. This value is then used as an initial flux to calculate the actual flux of the CT during the course of the fault with the secondary current. The magnetizing current is then estimated using the magnetization curve and the calculated flux value. The compensated secondary current can be estimated by adding the magnetizing current to the secondary current. Test results indicate that the algorithm can accurately compensate a severely distorted secondary current signal.