Pakistan's remittances hit 7-month high in March, thanks to Ramadan, Eid
Remittances from Pakistanis living abroad reached a seven-month high of $2.5 billion in March, presumably as a result of Ramadan and Eid-ul-Fitr, Geo News has reported.
According to figures released on Monday by the State Bank of Pakistan (SBP), the inflow of workers' remittances was 27% higher than it had been in the previous month of February, but it was 11% lower than it had been in March 2022.
Additionally, inflows continued to be quite significant as non-resident Pakistanis used legal channels to send money to their family members as a result of the closing gap between interbank and open market rates.
Samiullah Tariq, head of research at Pakistan-Kuwait Investment Company, termed the increase a "good omen", elaborating that the difference between the kerb and interbank rates was minimal.
"Remittances number is highest for past seven months; however, this year Ramadan has started earlier which is why remittance inflow increased earlier than last year," he explained.
Historical patterns suggested that prior to the annual Eid holidays, Pakistanis living abroad sent record-high remittances.
Tahir Abbas, the head of research at Arif Habib Limited, told Geo.tv that the Ramadan factor, which often attracts bigger flows due to family commitments, welfare, charity, etc., is responsible for the monthly increase in remittances.
"The flows in the upcoming months are expected to remain elevated due to another Eid [Eid ul Adha] falling by the end of this fiscal year," he maintained.
The Ministry of Finance has projected that the remittances will "further improve due to positive seasonal and Ramadan factor".
Meanwhile, the central bank — in its monthly remittance bulletin — stated that with the cumulative inflow of $20.5 billion during the first nine months of the fiscal year 2022-23, the remittances decreased by 10.8% as compared to the same period last year.
It should also be noted that with remittances widely surpassing the Pakistan Bureau of Statistics (PBS) trade deficit data this month, the possibility of a current account surplus has increased to a great extent.
It should be noted that the SBP trade deficit data point is usually even lower than the PBS trade deficit, adds the Geo News report.
In its monthly outlook report, the Ministry of Finance also mentioned that the current account deficit is likely to remain on the lower side keeping in view the economic factors contributing to the numbers.
Pakistan is in danger of defaulting on its debt, with an International Monetary Fund (IMF) bailout programme stalled since November, while a bruising political battle is raging between the government and former prime minister Imran Khan.
The cash-strapped nation is in dire need of funds with its foreign exchange reserves hovering around $4.2 billion which provides barely one month of import cover.
Country-wise data
Pakistanis living in Saudi Arabia sent the largest amount of money, $563.9 million, in March. It was, however, 24.04% less than the $454.6 million received in February.
Expatriates in the UAE returned home 25.52% more money than they received, with receipts increasing from $406.7 million to $324 million.
Remittances from Pakistanis living in the UK climbed by 33.12% to $422 million. In February, they sent $317 million.
Furthermore, remittances from other Gulf Cooperation Council (GCC) nations fell by 10.33% to $297.6 million, while inflows from European countries increased by 21.72% to $298.6 million in the month under review compared to February.