Inflow of overseas workers’ remittances clocked in at $2.849 billion in September, a massive 29% higher on a year-on-year (YoY) basis when compared with $2.208 billion in the same month of the previous year, showed data released on Wednesday by the State Bank of Pakistan (SBP).
On a month-on-month (MoM) basis, the inflow in September was 3% lower when compared to $2.943 billion in August 2024.
During 3MFY25, remittances went up by nearly 39% YoY to $8.8 billion as compared to $6.3 billion in 3MFY24.
Experts credit the increase in inflows to the stability of the PKR exchange rate, a narrowing gap between open and inter-bank market rates, and a rise in the number of workers relocating abroad.
“These stronger inflows will help Pakistan maintain PKR stability and containing the current account deficit,” said Mohammed Sohail, CEO of brokerage house Topline Securities, in a note.
Home remittances play a significant role in supporting the country’s external account, stimulating Pakistan’s economic activity as well as supplementing disposable incomes of remittance-dependent households.
Pakistan’s remittance inflow stands at $2.9bn in August, up 40.5% year-on-year
Breakdown of remittances
Overseas Pakistanis in Saudi Arabia remitted the largest amount in September 2024 as they sent $681.3 million during the month. The amount declined by 4% on a monthly basis, but was 27% higher than the $538.3 million sent by the expatriates in the same month of the previous year.
Inflows from the United Arab Emirates (UAE) improved by 4% on a monthly basis, from $538.4 million in August to $560.3 million in September. However, on a yearly basis, remittances jumped by 40%, as compared to $399.8 million reported in the same month last year.
Remittances from the United Kingdom amounted to $423.6 million during the month, a decrease of 11% compared to $474.8 million in August 2024. YoY inflows from UK improved by 36%
Meanwhile, remittances from the European Union lessened by 3% MoM as they amounted to $365.3 million in September 2024.
Overseas Pakistanis in the US sent $274.9 million in September 2024, a MoM decrease of 15%.
On Tuesday, the SBP, to enhance the flow of home remittances, revamped the incentive structure for banks and Exchange Companies (ECs). Under the new system, both banks and ECs will receive two types of incentives – Fixed Component Incentives and Variable Component Incentives.
Under the fixed incentives, ECs will now receive Rs2 for every USD of remittances surrendered to the SBP’s designated banks, while banks will get a reimbursement of SAR 20 against all eligible home remittance transactions of USD 100 and above.
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