Karachi, March 8, 2024 – The State Bank of Pakistan (SBP) reported a substantial 13 percent Year-on-Year (YoY) growth in workers’ remittances to Pakistan in February 2024.
According to the central bank, the inflow of remittances reached $2.25 billion during the month, compared to $1.99 billion in the same period the previous year, signaling a positive trend for the country’s economy.
The surge in remittances is attributed to several factors, with government initiatives playing a significant role. Recent actions by government agencies and the central bank aimed at curbing speculation in forex trading and preventing routes for currency smuggling have contributed to the increased inflow. The measures taken to stabilize the currency market have instilled confidence among overseas Pakistanis, encouraging them to use regular banking channels for sending their hard-earned money back home.
Stability in the exchange rate over the past six months has been another driving factor behind the rise in remittances. The assurance of a steady exchange rate provides a sense of security to overseas workers, prompting them to opt for traditional banking channels instead of alternative methods.
Despite the impressive YoY growth, the inflow of remittances experienced a 6.24 percent Month-on-Month (MoM) decline in February 2024, dropping from $2.40 billion in January 2024. Analysts attribute this dip to the shorter duration of February and the occurrence of holidays associated with the General Elections.
Market analysts suggest that the decline in remittances for February should be seen in the context of specific calendar and political events, rather than as an indication of a sustained trend. The shorter month, coupled with disruptions caused by the electoral process, likely influenced the month-on-month decrease.
Despite the dip in February, the overall performance of workers’ remittances during the first eight months (July – February) of the fiscal year 2023-24 reflects a relatively stable trend. The cumulative remittances during this period amounted to $18.08 billion, registering a marginal decrease of 1.2 percent compared to the same period in the previous fiscal year when remittances stood at $18.31 billion.
The stability in the remittances indicates resilience in the inflow of funds from overseas Pakistanis, even amidst global uncertainties. As the country navigates economic challenges and political transitions, the sustained growth in workers’ remittances remains a positive indicator for Pakistan’s economic stability and the financial well-being of its citizens.
The State Bank of Pakistan and other relevant authorities will continue to monitor and adapt policies to ensure a conducive environment for remittances, aiming to strengthen the country’s economic foundation and enhance the financial prospects of its people.
