KARACHI: Pakistan recorded year-on-year growth of 29 percent in workers’ remittances with inflows of $2.8 billion in September, the central bank said on Wednesday, with the highest contributions from Saudi Arabia and the UAE.
Remittances bring billions of dollars annually from overseas Pakistanis and are vital to the country’s struggling economy. These inflows bolster foreign exchange reserves, stabilize the balance of payments, and support the Pakistani currency.
“Remittances inflows during September 2024 were mainly sourced from Saudi Arabia ($681.3 million), United Arab Emirates ($560.3 million), United Kingdom ($423.6 million) and United States of America ($274.9 million),” the central bank said.
In the first quarter of the current fiscal year, Pakistan received $8.8 billion in remittances, representing a significant growth of 38.8 percent compared to the same quarter last year, central bank data showed.
The State Bank of Pakistan on Tuesday announced a three-time increase in monetary incentives for exchange companies to bring more remittances into the country.
The bank increased incentives to Rs4 per US dollar for exchange companies on home remittances effective Oct. 1.
According to the circular, ECs will be paid on a fixed component with a base rate of Rs2 for each US dollar of home remittances surrendered to SBP-designated banks.
On the variable component, ECs will be paid Rs3 for each incremental US dollar surrendered to encourage growth in home remittances up to 5 percent or $25 million – whichever is lower – than the previous year.
Further, Rs4 per US dollar will be paid against incremental remittances above 5 percent or over $25m, compared to the previous year.
