Remittances slip 2.4% MoM on US, UAE dip

Pakistan received $3.14 billion in workers' remittances during August 2025, which was 2.4% lower than July inflows of $3.21 billion, as remittances from the US, the UAE and South Korea slowed down, though they were partially offset by stronger receipts from Saudi Arabia and EU countries.

Pakistan's remittances grew 7% year-on-year in August, but inflows from key corridors declined, raising concerns about sustainability despite overall growth, according to the State Bank of Pakistan (SBP). In spite of robust inflows from Saudi Arabia, the UAE and the European Union (EU), remittances from the United States fell 13.7% in August compared to last year, highlighting Pakistan's reliance on Middle Eastern markets to offset the weakening North American contributions.

Pakistan's remittance growth remains heavily dependent on the Gulf region, with Saudi Arabia and the UAE alone contributing nearly half of inflows in August, exposing the country to risks of economic and policy shifts in host countries.

While remittances from Europe surged 18%, sharp declines from Malaysia (-19%) and South Korea (-11%) indicate volatile inflows from secondary labour markets.

Cumulatively, with an inflow of $6.4 billion, the remittances increased 7% during the first two months of FY26 compared to $5.9 billion in the same period of last year.

Remittances during August were mainly sourced from Saudi Arabia ($736.7 million), the United Arab Emirates ($642.9 million), the United Kingdom ($463.4 million) and the US ($267.3 million).

Analysts caution that slowing inflows from advanced economies could weigh on Pakistan's external account stability, if remittances from the Gulf weaken in the coming months. Meanwhile, the SBP conducted two separate Open Market Operations (OMOs) on Monday to inject liquidity into the financial system. In the conventional reverse repo operation, the central bank injected Rs238.4 billion for a four-day tenor, accepting all the six bids received at a rate of 11.07% per annum.

In a parallel Shariah-compliant Mudarabah-based OMO, the SBP injected an additional Rs78 billion, also for a four-day period. This operation saw the acceptance of two bids at a slightly higher rate of 11.14% per annum.

Gold prices in Pakistan soared to yet another all-time high, mirroring a rally in the international market, where the yellow metal crossed the $3,600 mark for the first time. Softer US labour data bolstered expectations of a Federal Reserve rate cut next week, fueling the surge.

In the local market, the price of gold per tola jumped Rs6,100 to settle at a record high of Rs384,000, according to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA). Similarly, the price of 10 grams of gold climbed Rs5,230, reaching a historic high at Rs329,219.

"This is the highest level we have ever seen," Abdullah Abdul Razzaq, an APSGJA member, commented. "Gold and silver, both locally and internationally, are at record highs. Such levels have never been reached before." Silver prices touched Rs4,338 after an increase of Rs23 in Pakistan. Spot gold rose 1.5% to $3,639.43 per ounce, as of 12:00 pm EDT (1600 GMT). Bullion hit a record high of $3,646.29, according to Reuters. US gold futures for December delivery were up 0.7% to $3,680.30. Spot silver rose 1.1% to $41.43 per ounce, touching its highest since September 2011. Meanwhile, the rupee extended its upward momentum against the US dollar, recording a marginal appreciation of 0.01% in the inter-bank market. The currency closed at 281.62 per dollar, up three paisa, marking its 22nd consecutive gain against the greenback.