Remittances increase to $2.38 billion in December 2023

SBP report says remittances during December 2023 were mainly sourced from Saudi Arabia, UAE, UK and US

KARACHI:

The inflow of workers' remittances sent by overseas Pakistanis increased by 13% to $2.38 billion in December 2023 as funds were dispatched through official channels following the return of stability in the rupee-dollar parity and the crackdown against illegal currency networks. 

The improvement in the remittances is expected to fuel the ongoing gradual rally in the rupee against the US dollar and strengthen the market as the current account is expected to be in surplus for the second consecutive month of December 2023.

The State Bank of Pakistan (SBP) reported that remittances rose 13% compared to $2.10 billion when compared to December 2022.

Inflows also showed an improvement of 5.5% compared to $2.26 billion in November 2023. 

Remittances, however, have cumulatively slowed down by 7% in the first half (Jul-Dec) of the current fiscal year 2023-24 to $13.45 billion compared to $14.42 billion in the same period of the last fiscal year, according to the central bank.

Read Call to root out illegal inflow of remittances

Topline Securities Chief Executive Officer (CEO) Muhammad Sohail said the latest monthly inflows of $2.38 billion are higher than the 2023 average of $2.20 billion a month.

The SBP also reported remittance inflows during December 2023 were mainly sourced from Saudi Arabia at $577.6 million, the United Arab Emirates at $419.2 million, the United Kingdom at $368.0 million and the United States at $263.9 million.

Market talk suggests the receipts have boosted in the wake of the caretaker government's action against foreign currency smugglers and also the hawala-hundi operators and hoarders since September 2023.

The operation crushed the illicit currency markets, especially in the bordering areas of Afghanistan and strengthened the hold of official operating networks such as commercial banks and authorized exchange companies.

The crackdown did not only help arrest the freefall of the domestic currency but also helped it bounce back by over 9% or around Rs26 in the past four months, closing at a 10-week high at Rs281.22 against the US dollar on Tuesday.

Earlier, it had hit an all-time low at Rs307.10/$ in the first week of September 2023.