KARACHI: The remittances sent by overseas Pakistanis increased year-on-year in February, while the cumulative inflows for the first eight months of FY24 fell by 1.2 per cent.

The State Bank of Pakistan’s data released on Friday revealed that the country received $2.249 billion in February, a decrease of $148 million or 6pc compared to $2.397bn in January.

However, February witnessed a 13pc increase in inflows compared to $1.990bn in the same month of FY23.

The FY23 was the poorest among the years, with inflows falling by $4bn compared to the preceding financial year, FY22. This posed a significant blow to the economy as the country had been attempting to secure dollars to avoid sovereign default. The then-government succeeded in signing an agreement with the IMF for a $3bn Stand-By Arrangement (SBA) to save the country from default.

The latest SBP data indicates that during July-February, the remittances are still lower than the previous year, suggesting that the country has yet to recover from the worst performance in FY23.

During the eight months, the country received a total of $18.082bn, which was 1.2pc down compared to $18.308bn in the same period of the previous fiscal year, a loss of $226m.

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During July-February, the highest remittances were received from Saudi Arabia, reaching $4.381bn, but it was still 1.2pc less than the last year’s inflows from the same country.

The inflows from the United States and the UK noted an increase of 4.7pc and 1.6pc, with $2.147bn and $2.696bn, respectively, during the same period. Although the inflows from the UAE declined by 2.6pc, they were the second-highest remittances on the list of countries, with a total of $3.12bn during July-February.

The inflows from EU countries have been increasing every month, reaching $2.248bn during the first eight months with a growth of 9.7pc. Pakistan also received $1.974bn from GCC countries.

Rupee gains

Meanwhile, the rupee appreciated by 25 paise against the US dollar in the inter-bank market on Friday. The SBP reported the closing price of the dollar at Rs279.04, compared to Rs279.29 the day before.

However, the currency market did not find any reason for the PKR appreciation, particularly when the foreign exchange reserves of the SBP slipped twice during the last couple of weeks to $7.895bn.

Hopes were high for the third tranche of $1.2bn from the IMF by the end of this month or the beginning of next month.

Sovereign dollar bonds

On the other hand, country’s sovereign dollar bonds gained as much as three cents on Friday, hitting their highest since early 2022, after the IMF said it was looking forward to working with the new government, Reuters adds. The 2036 maturity gained the most, adding three cents to trade at 76.64 cents. It was on track for second week of gains of around five cents.

Published in Dawn, March 9th, 2024