Remittances to Pakistan are expected to reach a record-breaking $3.5 billion in March, marking a 15 per cent increase compared to the previous month.
This surge, attributed largely to the inflow of funds during Ramazan, has provided much-needed relief to the country’s finances, offering a buffer against external debt repayments and bolstering the exchange rate, according to financial experts and currency dealers.
Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan (ECAP), noted that the country had sold approximately $450 million to banks in March—a sharp rise compared to both February and the same period last year. He highlighted that the Ramazan period played a significant role in driving this surge.
The estimated remittances for March stand at over $3.5 billion, compared to $3.11 billion in February. In contrast, the country had received $2.95 billion in March 2024 and $2.5 billion in March 2023, indicating a strong upward trajectory in remittance inflows.
For the current fiscal year (FY25), the government had initially set a target of $35 billion in remittances. However, financial analysts predict that actual inflows could surpass this estimate, potentially reaching $36 billion by the end of the fiscal year. “The momentum is strong, and we are likely to exceed the target,” said a currency dealer in the banking sector.
So far in FY25, remittance inflows have seen impressive growth, rising by 32.5 per cent in the first eight months of the fiscal year. Between July and February, Pakistan received a total of $23.96 billion in remittances, up by $5.9 billion from the same period in FY24. This significant increase points towards a potential record-breaking year, with expectations of an additional $5 billion inflow to meet the government’s target of $35 billion.
Mr Paracha confirmed that the target for the year has already been achieved, and Pakistan may well receive $36 billion in remittances by the end of FY25.
Notably, the UAE has emerged as a key source of remittances, with inflows from the Gulf nation rising by 56 per cent to $4.85 billion in the first eight months of FY25. Saudi Arabia remains the largest contributor, with remittances from the kingdom increasing by 34.6 per cent to $5.89 billion over the same period.
Currency dealers in the banking market are optimistic that the March inflows from both countries will set new records. Some sources within the financial sector speculate that Prime Minister Shehbaz Sharif’s recent visit to Saudi Arabia may have included discussions on easing visa restrictions for Pakistani workers, further boosting remittance inflows.
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