State Bank of Pakistan reports record remittance inflow

In April 2024, Pakistan experienced a significant boost in workers' remittances, reaching $2.8 billion, the second-highest amount recorded. This influx has played a crucial role in strengthening the country's foreign exchange reserves and maintaining a stable rupee-dollar exchange rate. The State Bank of Pakistan (SBP) revealed a 3.5% increase in remittances, totaling $23.8 billion in the first ten months of the fiscal year 2023-24 compared to the same period in the previous year.

The main sources of remittance inflows in April 2024 were Saudi Arabia ($712.0 million), the United Arab Emirates ($542.3 million), the United Kingdom ($403.2 million), and the United States of America ($329.2 million). March 2024 witnessed a peak in remittances close to $3 billion, marking a 23-month high. Even excluding this peak, April still saw remittance inflows reaching a 20-month high.

SBP reported a substantial 28% increase in remittances in April 2024 compared to the same month in the previous year, amounting to $2.8 billion. However, this figure represented a slight decrease of nearly 7% from the peak observed in March 2024. Earlier projections by SBP Governor Jameel Ahmad in January 2024 anticipated total remittances for the fiscal year 2023-24 to exceed $28 billion, surpassing the $27 billion received in the previous fiscal year.

The surge in remittances during March and April can be attributed to the Ramazan and Eid festivals, prompting non-resident Pakistanis to send increased funds to support their families amidst high inflation. Moreover, the sustained high inflows in March and April were facilitated by expatriates utilizing official channels such as commercial banks and exchange companies, a departure from previous practices of using unofficial channels.

The stability in the rupee-dollar exchange rate, coupled with the crackdown on illegal currency markets and illicit traders like hundi-hawala operators, has instilled confidence among non-resident Pakistanis to continue sending funds through legitimate channels.

The recent surge in workers' remittances to Pakistan reflects the trust and confidence of overseas Pakistanis in the country's economic stability. The consistent increase in remittance inflows, particularly during festive seasons, highlights the importance of these funds in supporting families back home. By encouraging the use of official channels for remittance transfers, Pakistan aims to ensure transparency and security in financial transactions, ultimately benefiting both the economy and its citizens.