Tag: workers' remittances

  • Overseas workers’ remittances surge to $3 billion in March

    Overseas workers’ remittances surge to $3 billion in March

    In March 2024, Pakistan witnessed a significant surge in the influx of overseas workers’ remittances, reaching a notable milestone of $3 billion.

    This remarkable figure reflects a remarkable 31.3 per cent increase on a month-on-month basis compared to February 2024, when the remittances stood at $2.25 billion.

    The latest data released by the State Bank of Pakistan (SBP) unveiled this positive trend, highlighting the pivotal role remittances play in Pakistan’s economic landscape.

    Year-on-year comparisons also underscored the upward trajectory, with a 16.4 per cent increase noted in March 2024 compared to the same month in the previous year, when remittances amounted to $2.54 billion.

    Such consistent growth in remittances holds significance beyond mere monetary figures, as these funds contribute substantially to bolstering the country’s external account and fueling economic activity.

    Moreover, they serve as a crucial supplement to the disposable incomes of remittance-dependent households, enhancing their financial resilience.

    In a broader fiscal context, the first nine months of Fiscal Year 2024 witnessed a steady rise in workers’ remittances, totaling $21.0 billion.

    This marks a modest 0.9 per cent increase compared to the corresponding period in the previous fiscal year, where remittances amounted to $20.8 billion.

    Such stability and growth in remittances underscore the resilience of Pakistan’s overseas workforce and their commitment to supporting their families and homeland.

    Breaking down the sources of these remittances, Overseas Pakistanis in Saudi Arabia emerged as leading contributors, with remittances totaling $703.1 million in March 2024.

    This represents a substantial 30 per cent increase compared to the previous month and a noteworthy 24 per cent increase year-on-year.

    Similarly, remittances from the United Arab Emirates (UAE) witnessed a remarkable surge, jumping by 43 per cent on a monthly basis to reach $548 million in March, reflecting a 34 per cent increase compared to the same period last year.

    The United Kingdom also played a significant role in this surge, with remittances soaring to $462 million in March 2024, marking a notable 33 per cent increase compared to February 2024.

    Meanwhile, remittances from the European Union exhibited a robust 19 per cent monthly growth and a 6 per cent year-on-year improvement, amounting to $315 million in March 2024.

    Overseas Pakistanis in the United States also contributed significantly, send`ing $373 million in March 2024, reflecting an 18 per cent increase compared to the previous year and a substantial 30 per cent increase month-on-month.

  • SBP reports $112 million increase in workers’ remittances

    SBP reports $112 million increase in workers’ remittances

    In September 2023, Pakistan experienced a notable surge in workers’ remittances, marking a 5.3 per cent increase compared to August 2023.

    This uptick can be primarily attributed to a crackdown on the informal money transfer systems known as hawala and hundi.

    According to the State Bank of Pakistan (SBP), the country received remittances amounting to $2.206 billion in September 2023, up from $2.094 billion in August 2023, equating to a $112 million rise.

    The majority of remittance inflows for September 2023 were derived from several key sources, with Saudi Arabia contributing $538.2 million, the United Arab Emirates $400 million, the United Kingdom $311.1 million, and the United States of America $263.4 million.

    This increase in remittances can be linked to the fact that a substantial number of Pakistani expatriates resorted to using the Hawala/Hundi channels during the initial two months of the fiscal year, largely due to a significant disparity between official and unofficial exchange rates.

    Subsequently, strict enforcement measures against illegal currency dealers have curbed this volatility, leading to a gradual appreciation of the Pakistani rupee in both the interbank and open currency markets.

    In the last month, the rupee has rebounded by 9 per cent, recovering from its record low of 307.1 against the dollar on September 5. The crackdown on these illicit currency dealers has also contributed to the 5 per cent month-on-month increase in remittances for September.

    However, when examining the entire first quarter of fiscal year FY24, the overall home remittances to Pakistan have experienced a sharp decline of 20 per cent, totalling $1.57 billion. Home remittances for the July-September period of FY24 amounted to $6.33 billion, a decrease from $7.90 billion during the same period in the previous fiscal year, FY23.

    During this initial quarter, remittances from all major sources displayed a downward trajectory. Specifically, home remittances from Saudi Arabia decreased by 22 per cent to $1.516 billion for July–September in FY24, down from $1.946 billion in the equivalent period in FY23.

  • IMF loan delay continues to impact Pakistani rupee

    IMF loan delay continues to impact Pakistani rupee

    During trading on Wednesday, the Pakistani rupee experienced a slight decrease against the US dollar, with a depreciation of almost 0.06 per cent in the inter-bank market. At around 12:45 pm, the currency was being traded at Rs284.06, which is a decline of Re0.16.

    This comes after the rupee had previously regained some ground against the US dollar on Tuesday, settling at Rs283.9 in the inter-bank market. The International Monetary Fund (IMF) Extended Fund Facility (EFF) has been stalled since last year, and market participants are waiting for its resumption.

    Experts have suggested that the reduced demand for US dollars can be attributed to the increase in inflows from workers’ remittances and a decline in import payments. Globally, the dollar saw some stability on Wednesday after being influenced by bond market volatility. Investors closely monitored US economic indicators, Federal Reserve commentary, and corporate earnings for indications about the path for interest rates.

    The dollar index, which measures the greenback against six major peers, rose by 0.11 per cent to 101.83 in Asian trading, following a 0.36 per cent decline on Tuesday that reversed the 0.54 per cent increase from the previous session.

    Oil prices, which serve as a significant indicator of currency parity, declined on Wednesday as the market considered potential interest rate hikes from the Federal Reserve. Such hikes could slow growth and dampen oil consumption, offsetting the impact of falling US inventories and strong Chinese economic data.