Business

Pakistan’s remittances fall 9.5% to $2bn in February

Published

2 years ago

Farwa

Workers’ remittances increase by 4.9% month-on-month.
Remittances for July-Feb FY2023 drop 10.8% to $17.99bn.
Highest remittance inflows sent by Pakistanis in Saudi Arabia.

Remittances sent home by overseas workers dropped 9.5% to $2 billion in February 2023, year-on-year, as exchange rate fluctuations, economic uncertainties, and lack of trust in the system continued to encourage the use of illegal channels.

According to data released by the State Bank of Pakistan (SBP) on Friday, remittances stood at $2.2 billion in the same month of the previous year.

On the other hand, month-on-month, these inflows increased by 4.9% compared to $1.9 billion recorded in January 2023.

Workers’ remittances recorded an inflow of US$2.0 billion during Feb 23. For details see https://t.co/rPOvn9CTjf https://t.co/7XBd4uNES4 pic.twitter.com/vcQ6cZR1yU
— SBP (@StateBank_Pak) March 10, 2023

Remittances for the first eight months (July-February) of the fiscal year 2022-23 were recorded at $17.99 billion, showing a fall of 10.8% compared to $20.18 billion in the same period of FY2022.

A breakdown shows the highest amount of remittances during February 2023 was mainly sent home from Saudi Arabia ($454.6 million), followed by the United Arab Emirates ($324.0 million), the United Kingdom ($317.0 million) and the United States of America ($219.4 million).

The SBP-held foreign exchange reserves rose above the $4 billion mark after the cash-strapped nation received a $500 million loan from a Chinese bank.

The central bank, in its weekly bulletin, said that its foreign exchange reserves have increased by $487 million to $4,301 million as of the week ended March 3, which will provide an import cover of around a month.

The SBP received $500 million last week from the Industrial and Commercial Bank of China (ICBC) as part of the institution’s $1.3 billion facility, just days after it had received $700 million from the China Development Bank.

Remittances have been thinning out steadily and the trend is likely to press ahead of Ramazan, the holy month of fasting, and Eid-ul-Fitr — the most difficult times for inflation-ravaged citizens — when overseas workers remit large amounts to Pakistan to support their loved ones.

There has been an improvement in dollar supply, but the country needs more liquidity to cope with the demand for imports.

Moreover, closing the gap between the open market and the interbank market is imperative to discourage the wholesale use of unofficial channels.

Given its bare minimum foreign exchange reserves, Pakistan direly required dollar inflows that have not been very steady.

Finance Minister Ishaq Dar said on Thursday Pakistan was “very close” to signing a staff-level agreement with the International Monetary Fund (IMF), which would offer a critical lifeline for taming a balance of payment crisis.

An agreement would release $1.1 billion to the cash-strapped South Asian economy.

“We seem to be very close to signing the staff level agreement, hopefully, God willing, in the next few days,” Dar said at a seminar in Islamabad.

“I and my team are absolutely committed to complete this program to the best of our ability,” he said, adding: “We have been in the review and I think it has taken longer than it should have in my opinion.”

Islamabad has been hosting an IMF mission since early February to negotiate the terms of a deal, including the adoption of policy measures to manage its fiscal deficit ahead of the annual budget due around June.

The funds are part of a $6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations.

Business

The amount of trade between Saudi Arabia and Pakistan hits $700 million.

Published

13 hours ago

Farwa

Through the Special Investment Facilitation Council (SIFC), Pakistan’s trade connections with Saudi Arabia have grown significantly, with bilateral trade volume rising from $546 million to $700 million and exports to the Kingdom growing by 22%.

As bilateral economic cooperation continues to grow, Saudi investors have shown a strong interest in Pakistan’s construction, energy, agricultural, and information technology sectors. The objective for exporting IT services between the two countries has been raised from $50 million to $100 million.

Saudi Arabia has set up a help desk dedicated to making it easier for Pakistani IT companies to register in the Kingdom in order to expedite commercial procedures. The goal of this program is to speed up economic collaborations between the two countries and lower administrative barriers.

The well-known Saudi restaurant chain AlBaik has revealed plans to open locations in Pakistan, which is a big step for the food service industry and should lead to the creation of new job possibilities in the area.

Officials have noted that stronger business links between the two countries lead to greater economic stability, and the SIFC has played a crucial role in promoting these trade advancements. For bilateral trade and investment projects, the Council remains a crucial facilitator.

According to a trade official with knowledge of the developments, “the establishment of dedicated support mechanisms, such as the help desk for IT companies, demonstrates a commitment to long-term economic partnership,” The goal of these programs is to improve the conditions for commercial collaboration between the two nations.

The increasing amount of trade and the diversity of investment sectors show that Saudi Arabia and Pakistan’s economic ties are changing as both countries seek to deepen their business alliances in a number of industries.

Business

After more than 50 years, Bangladesh and Pakistan resume direct trade.

Published

13 hours ago

Farwa

After more than 50 years, the two governments will resume direct bilateral trade, with Bangladesh’s food ministry announcing Sunday that it will receive a supply of 25,000 tonnes of rice from Pakistan next month.

After former Prime Minister Sheikh Hasina was overthrown last August, relations between Bangladesh and Pakistan have begun to improve after decades of tense relations.

Since then, there have been increased bilateral interactions between Bangladesh and Pakistan. Nobel laureate Muhammad Yunus, the interim government’s senior adviser, has met twice with Pakistani Prime Minister Shehbaz Sharif.

According to the food ministry, Dhaka completed an agreement earlier this month to import grains from Pakistan.

“On March 3, the first shipment of 25,000 tonnes will reach Bangladesh,” Zia Uddin Ahmed, a ministry assistant secretary, told Arab News.

“This is the first time that Bangladesh has started importing rice from Pakistan at the government-to-government level since 1971.”

Following direct maritime contact between the two South Asian countries in November—a Pakistani cargo ship stopped in Bangladesh for the first time since 1971 with imports and exports arranged by private companies—their trade relations grew.

Resuming trade with Pakistan is a significant step for Bangladesh, according to Amena Mohsin, a lecturer at North South University and a specialist in international relations.

“We want to see progress in our bilateral relationship with Pakistan. Most significantly, we are currently going through a low point dispute with India, even though we constantly diversify our partnerships.

This most recent move to purchase rice from Pakistan is really significant in this context,” she told Arab News.

Business

The total amount of Pakistan’s liquid foreign reserves is $15.95 billion.

Published

3 days ago

Farwa

As of February 14, Pakistan’s total liquid foreign reserves were $15,947.9 million, with the State Bank of Pakistan’s (SBP) holdings being $11,201.5 million.

Official figures for the week ending February 14, 2025, show that the central bank’s liquid foreign exchange reserves rose by $35 million to $11,201.5 million.

Commercial banks maintained net foreign reserves of $4,746.4 million during the period under review, according to the breakdown of foreign reserves.

The nation’s total liquid foreign reserves as of the week ending February 07, 2025, were $15,862.6 million.

Of these, the central bank held $11,166.6 million in foreign reserves, while commercial banks kept $4,696 million in net reserves.