Overseas Pakistanis send home $3.16 billion in June, second-highest ever

Overseas Pakistanis sent $3.16 billion home in June, the second-highest amount recorded so far, data released by the State Bank of Pakistan (SBP) on Tuesday showed.

The highest amount of remittances — $3.24 billion — was sent in May 2024.

June’s figure is up 44% from last year when remittances clocked in at $2.187 billion.

Overall, the amount of remittances sent in fiscal year 2023 -2024 reached $30.28 billion. This is also the second-highest figure after FY22’s $31.279 billion.

The increase in remittances will help shrink the current account — the difference between a country’s foreign income and expenses abroad — and potentially reduce pressure on the Pakistani rupee.

Remittances had dropped last year to as low as $1.9 billion in January and February amid concerns that Pakistan would default.

This had put pressure on the Pakistani rupee and led to a flourishing gray market — an illegal foreign exchange market that offered Rs20-40 per dollar more than the legal interbank and open markets.

As a result, overseas Pakistanis had started sending money through the gray market as their families would get a better exchange rate.

However, gray market operations have greatly reduced following a government crackdown and now, it offers only Rs2-3 more per dollar.

The difference between the interbank and open markets has also narrowed, which has encouraged overseas Pakistanis to send money through formal channels.

The rupee’s value has also improved due to the completion of an agreement between the Pakistan government and the International Monetary Fund (IMF) for a loan of $3 billion, which helped stave off default concerns and restore investor confidence.

Pakistan is likely to reach a new agreement with the IMF for a loan of $6.5 billion in the coming weeks. This will further increase the confidence of other multilateral donors and agencies.

Pakistan receives the highest amount of remittances from Saudi Arabia, the United Arab Emirates, the United Kingdom, and the United States of America. In FY24, the amount received from each country stood at $7.4 billion, $5.5 billion, $4.5 billion, and $3.5 billion, respectively.

These figures are up 14%, 19.5%, 12.5%, and 12%, respectively, compared to FY23.