November 10, 2023 (MLN): Workers' remittances have increased by 11.54% MoM in October to $2.46 billion, compared to $2.21bn in the previous month, the latest data issued by SBP revealed today.
Meanwhile, on a yearly basis, workers' remittances increased by 9.58% YoY as compared to $2.25bn in the same month last year.
The inflows mainly came from Saudi Arabia, contributing $616.78 million, followed by the UAE with $473.91m, the U.K. with 330.22m, the EU Countries with 297.54m, and the U.S. with $283.26m.
While on a cumulative basis, in 4MFY24, the total remittances stood at $8.79bn as compared to $10.14bn worth of inflows received in 4MFY23, depicting a fall of 13.31% YoY.
The remittances had been dropped in the earlier months of this year on account of increased disparity between official and grey market rates, as many non-resident Pakistanis preferred to use unofficial channels, which offered Rs20-25 higher exchange rate per dollar.
In response to these challenges, the authorities, led by the army, began crackdowns against speculators, hoarders, and smugglers to restrict illegal dollar outflows and effectively strengthening the PKR against the USD.
The crackdown has also exposed various bank staff members who colluded with these hoarders to store large amounts of dollars, which were subsequently used for hawala/hundi transactions.
Moreover, recent reforms introduced by the State Bank of Pakistan (SBP) to consolidate and transform various types of exchange companies into a single category with a well-defined mandate and higher capital requirements are also enhancing transparency.
To note, SBP suspended the authorization of four exchange companies in September, underscoring the central bank's commitment to ensuring compliance with regulatory standards.
These reforms also apply to the banks actively engaged in foreign exchange business, mandating them to set up wholly owned ECs to address the legitimate foreign exchange needs of the general public.
Following the guidelines of the central bank, several banks have decided to establish their own exchange company.
Furthermore, to resolve the issues relating to Afghan transit trade, Pakistan's Ministry of Commerce recently took a decisive step by imposing a ban on 212 items that were previously being imported into Afghanistan via Pakistan under the Afghan transit trade agreement.
This move, made through a Statutory Regulatory Order (SRO) issued on October 03, was in exercise of the powers conferred by the Imports and Exports (Control) Act, 1950.
Additionally, the FBR has imposed a 10% processing fee on five major categories of Afghan transit commercial goods imported into Afghanistan through Pakistan.
Posted on: 2023-11-10T09:43:16+05:00