🇵🇰 Remittances from Overseas Pakistanis

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Remittances up ahead of Ramazan​

Overseas Pakistanis send 18% higher remittances that reach $2.25b

Salman Siddiqui
March 09, 2024

DESIGN: IBRAHIM YAHYA


KARACHI The inflow of workers’ remittances rose 18% in February 2024 compared to the same month of last year, reaching $2.25 billion ahead of the fasting month of Ramazan that is beginning next week.

According to State Bank of Pakistan’s (SBP) data, the remittances had stood at $1.90 billion in February last year.

The higher inflows should help finance the trade deficit and keep the current account balance at breakeven level. They may also support the Pakistani rupee in standing at stronger levels compared to the US dollar and currencies of other trading partners.

Non-resident Pakistanis send more funds to their family members and friends back home ahead of and during Ramazan and Eid festival to help them cope with high inflation and meet relatively higher expenditures.

On a month-on-month basis, however, the remittances fell 6% to $2.25 billion in February compared to $2.39 billion in the prior month.

Topline Securities Deputy Head of Equity Sales Ali Najib linked the drop in remittances with lesser working days in February compared to January as a notable number of non-resident Pakistanis sent money on a weekly or fortnightly basis.

Optimus Securities Head of Research Maaz Azam supported Najib’s views, saying the inflows would have been stable on a month-on-month basis had the number of days in the two months been equal.

Overseas Pakistanis sent on an average $77.57 each day in February compared to $77.35 a day in January, which showed comparatively better inflows in February.

In the first eight months (Jul-Feb) of the current fiscal year, the expatriate Pakistanis remitted $18.08 billion, showing a nominal 1.25% drop compared to $18.31 billion in the same period of last fiscal year, according to the central bank data.

SBP Governor Jameel Ahmad anticipated in late January 2024 that workers’ remittances would increase to $28 billion in the current fiscal year compared to $27 billion in FY23.

He projected that inflows would remain higher in the second half of the fiscal year as against the first one, believing the stability of the rupee-dollar parity and the beginning of Ramazan and two Eid festivals would encourage expatriates to send higher amounts to their family members in Pakistan.

Azam said the remittances increased 18% in February compared to the same month of last year because the Pakistani rupee remained stable in the month compared to high currency volatility in February 2023.

He recalled that former finance minister Ishaq Dar had controlled the rupee-dollar parity and kept the rupee stronger artificially in the inter-bank market in February 2023. The tactic led to the establishment of illegal currency markets in border areas, particularly with Afghanistan, and encouraged the illicit Hawala-Hundi system operators to smuggle foreign currencies to neighbouring countries.

The illegal traders offered significantly higher dollar conversion rates for remittances. Consequently, a significant number of overseas Pakistanis sent remittances through unofficial channels, resulting in lower inflows through official channels in February 2023.

Later, the caretaker government launched a crackdown on currency smugglers and hoarders. The clean-up operation helped crush the illegal markets in border areas. This forced the non-resident Pakistanis to send remittances through official channels, which led to a boost in receipts in February this year.

Country-wise remittances

Workers’ remittances from Saudi Arabia increased 18% to $540 million in February 2024 compared to $455 million in the same month of last year.

Overseas Pakistanis sent 19% higher remittances from the UAE at $385 million compared to $324 million in the corresponding month of last year.

The expatriates dispatched 9% higher funds from the UK at $346 million compared to $317 million in February last year. They remitted 7% higher funds from EU counties that reached $263 million compared to $245 million in the previous year.

From the US, they dispatched $287 million, exhibiting a growth of 31% compared to $220 million last year.

The non-resident Pakistanis sent 102% higher remittances from other countries that touched $196 million compared to $97 million in the same month of last year.

Published in The Express Tribune, March 9th, 2024.

 

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Roshan Digital Accounts surpass of $8.749bn remittances​

Roshan Digital Accounts exceed $8.749 billion in remittances, with overseas Pakistanis investing $1.532 billion.

News Desk
October 14, 2024

Roshan Digital Accounts (RDA) have surpassed a remittance volume of $8.749 billion for overseas Pakistanis.

According to the State Bank, overseas Pakistanis have invested $1.532 billion through RDA, including $380 million in traditional New Pakistan Certificates, $656 million in Islamic New Pakistan Certificates, and $41 million in the Pakistan Stock Exchange.

On the other hand, The rupee has weakened against the USD, GBP, and other major currencies, while making modest gains against the euro, according to the latest exchange rates updated on Monday.

The indicative buying rate for the US dollar stood at Rs278.05 for selling and Rs277.55 for buying.

The British Pound (GBP) was quoted at Rs363.12 for selling and Rs362.47 for buying.

Additionally, Euro (EUR), stood at Rs303.79 for selling and Rs303.25 for buying.

Meanwhile, Pakistan Stock Exchange (PSX) made a marginal recovery in late trading on Friday as it crept up 30 points due to a strong earnings outlook for banking and auto sectors.

trading got off to a positive start, with the KSE-100 index reaching its intra-day high of 85,750.18 points.

However, the early momentum petered out as the index slipped below the 85,000 mark, hitting the intra-day low of 84,774.45 points before midday.

 

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Remittances jump by 44pc in two months​

Shahid Iqbal
September 10, 2024

KARACHI: Overseas Pakistanis sent 44 per cent more remittances in the first two months (July and August) of the current fiscal year (FY25), compared to the same period of the previous fiscal year.

In July, remittances went up by 48 per cent year-on-year, setting a trend of higher inflows. The receipts for July were $2.994 billion, but it dipped to $2.942bn in August.

According to data issued by the State Bank on Monday, the inflows during July-Aug FY25 rose to $5.936bn, while inflows in the same period of previous fiscal year FY24 was $4.123bn — an increase of $1.813bn, or 44 per cent.

The inflows must be a relief for the government at a time when it is struggling to strike a deal with the IMF for $7bn. This inflow would not only improve Pakistan’s image in the eyes of international rating agencies but will also open doors for other sources.

Pakistan is in dire need of dollars for debt servicing of $25bn in FY25.

The country managed to bring down the current account deficit in FY24 to a negligible $665 million while it was just $162m in July FY25. Although the economy suffered due to restricted imports and growth fell to just 2.4 per cent in FY24, the government succeeded in tackling the or current account deficit.

According to financial experts, if remittances keep improving at the same pace, the country would be able to increase its imports to spur growth.

Data showed that inflows from almost all destinations rose during the first two months while the highest increase among important destinations was from the UAE.

Remittances from UAE jumped by 84.3 per cent to $1149m from $624 in the first two months of the previous fiscal year.

However, the highest inflows were from Saudi Arabia, which rose 50.7 per cent. Remittances from Saudi Arabia shot up to $1.473bn during July-Aug FY25, compared to the same period of last year fiscal year.

The other important inflows were $ 918.3m from UK (up by 44.4 per cent); USA $622.4bn (up 23.5 per cent); GCC countries $569.7m (up20.4 per cent) and EU countries $726.6 per cent (up 26.5 per cent). The inflow from EU has exceeded the inflows from the GCC countries.

Currency experts said one of the reasons for higher remittances is the tough stance of the government against illegal currency business. They said the currency smuggling and Hundi and Hawala system are working at the lowest level.

Currency dealers in the open market also reported higher inflows as they have started selling more dollars in the banking market. The inter-bank market is showing stability in the exchange rate — a big attraction for exporters to sell their proceeds while it is also attractive for foreign investors.

Published in Dawn, September 10th, 2024

 

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More Pakistani moving out, may be one of the reason for increase.

Top 20 countries losing people to emigration in 2023:

1. Pakistan: -1,620,000
2. Sudan: -1,350,000
3. India: -979,000
4. China: -568,000
5. Bangladesh: -550,000
6. Nepal: -410,000
7. Turkey: -318,000
8. Ukraine: -300,000
9. Brazil: -240,000
10. Philippines: -164,000
11. Greece: -159,000
12. Uganda: -126,000
13. Venezuela: -113,000
14. Mexico: -101,000
15. Zimbabwe: -97,000
16. Azerbaijan: -84,000
17. Vietnam: -82,000
18. Nigeria: -58,000
19. Afghanistan: -49,000
20. Mali: -40,000

According to the UN World Population Prospects.
4:49 AM · Aug 11, 2024

 

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[Ghazi52]

Remittances to the rescue​

BR Research
October 14, 2024

The significance of worker remittances can be seen from the fact that over $8 billion came into the country in the first quarter of FY25 – comparable to $7 billion, 37-month EFF by the IMF. Remittances play a crucial role in supporting Pakistan’s economy, particularly by boosting foreign exchange reserves. The recent surge in inflows has been especially vital as the country experiences a stabilization in repatriation outflows.

By the close of 3QFY25, remittances reached $8.8 billion, marking a 39 percent year-on-year increase. In September 2024 alone, the country received $2.85 billion in remittances, up 29 percent year-on-year.

However, on a month-on-month basis, the September 2024 remittances were slightly down by 3 percent. This year-on-year growth can be attributed to overseas Pakistani workers sending funds back home, especially from key markets like Saudi Arabia, the UAE, the UK, and the USA.

Additionally, a strengthening Pakistani rupee, a narrowing gap between open market and interbank rates, and a rise in the number of workers migrating abroad have further contributed to remittance growth. The government and the State Bank of Pakistan (SBP) have also implemented policies to encourage the use of formal channels for sending remittances.

Saudi Arabia and the UAE remain the largest contributors to remittances, with year-on-year growth of 42 percent and 67 percent respectively in 1QFY25. Other key markets include the UK, USA, and EU countries, all showing positive, though smaller, growth rates.

In terms of remittance importance and volume, countries like India, Mexico, the Philippines, Bangladesh, Egypt, and Vietnam display similar trends.

They heavily rely on remittances from Middle Eastern countries such as Saudi Arabia and the UAE, and from Western economies like the USA and the UK. In terms of GDP percentage, remittance shares in these countries range between 5 percent and 9 percent, with Pakistan being more dependent on them than larger economies like India.

To ensure that these critical inflows remain strong, the focus should be on strengthening formal remittance channels and maintaining a competitive exchange rate.

In the long term, maintaining stable economic policies and providing enhanced incentives for formal remittance channels will be crucial to sustaining remittance inflows. Recently, the SBP announced a threefold increase in monetary incentives for exchange companies to encourage the mobilization of remittances.