Repatriation of profits and dividends on foreign investments in Pakistan stood at $102.9 million in January, marking a 19% decrease from the previous month.
During the first seven months of the fiscal year 2025, this figure saw a significant rise of 90%, reaching $1.32 billion.
The oil and gas exploration sector led the profit repatriation with $36.1 million, followed by the communications sector with $16.4 million, and the power sector with $16.1 million.
In FY23, profit repatriation in Pakistan was significantly low, with only around $331 million repatriated by foreign companies due to strict capital controls imposed by the State Bank of Pakistan (SBP) to manage the foreign exchange crisis; this figure saw a sharp increase in the following fiscal year (FY24) as the restrictions were eased.
An analyst noted that markets like Pakistan have been highly profitable. However, the issue arises from the repatriation of profits, which are earned in rupees and must be converted to U.S. dollars. With the U.S. dollar gaining strength and the rupee losing its value, considerable amounts are lost in such conversions.
The sharp rise in repatriation follows the easing of restrictions imposed by the government last year to conserve foreign exchange reserves.
The restrictions, heavily criticized by foreign investors, were a sticking point in Pakistan's negotiations with the International Monetary Fund (IMF).
As part of the conditions for a new $7 billion Extended Fund Facility, the IMF urged Pakistan to ease curbs on imports and remittances by multinational companies.
Comments
See what people are discussing