February 12, 2024 (MLN): Workers' remittances have increased by 26.16% YoY in January to $2.4 billion, compared to $1.9bn in the same month last year, the latest data issued by SBP revealed today.
Meanwhile, on a monthly basis, home remittances increased by 0.64% MoM as compared to $2.38bn in the previous month.
The inflows mainly came from Saudi Arabia, contributing $587.27 million, followed by the UAE with $407.61m, the U.K. with $362.14m, EU Countries with 290.06m, and the USA with 283.39m.
While on a cumulative basis, in 7MFY24, the total remittances stood at $15.83bn as compared to $16.32bn worth of inflows received in 7MFY23, depicting a fall of 2.98% YoY.
The year-over-year increase comes as the disparity between official and grey market rates has been largely eliminated. Previously, overseas Pakistanis preferred to use unofficial channels, which offered Rs20-25 higher exchange rate per dollar.
Moreover, the government-led crackdowns against speculators, hoarders, and smugglers have restricted illegal dollar outflows and effectively strengthened 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.
With extremely tight monetary and fiscal policies, demand for foreign currency as a store of value is decreasing as PKR has remained stable for nearly a year.
Furthermore, recent reforms introduced by the 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.
