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Pakistan’s remittances fall 9.5% to $2bn in February

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  • Workers’ remittances increase by 4.9% month-on-month.
  • Remittances for July-Feb FY2023 drop 10.8% to $17.99bn.
  • Highest remittance inflows sent by Pakistanis in Saudi Arabia. 

Remittances sent home by overseas workers dropped 9.5% to $2 billion in February 2023, year-on-year, as exchange rate fluctuations, economic uncertainties, and lack of trust in the system continued to encourage the use of illegal channels.

According to data released by the State Bank of Pakistan (SBP) on Friday, remittances stood at $2.2 billion in the same month of the previous year.

On the other hand, month-on-month, these inflows increased by 4.9% compared to $1.9 billion recorded in January 2023.

Remittances for the first eight months (July-February) of the fiscal year 2022-23 were recorded at $17.99 billion, showing a fall of 10.8% compared to $20.18 billion in the same period of FY2022.

A breakdown shows the highest amount of remittances during February 2023 was mainly sent home from Saudi Arabia ($454.6 million), followed by the United Arab Emirates ($324.0 million), the United Kingdom ($317.0 million) and the United States of America ($219.4 million).

The SBP-held foreign exchange reserves rose above the $4 billion mark after the cash-strapped nation received a $500 million loan from a Chinese bank.

The central bank, in its weekly bulletin, said that its foreign exchange reserves have increased by $487 million to $4,301 million as of the week ended March 3, which will provide an import cover of around a month.

The SBP received $500 million last week from the Industrial and Commercial Bank of China (ICBC) as part of the institution’s $1.3 billion facility, just days after it had received $700 million from the China Development Bank.

Remittances have been thinning out steadily and the trend is likely to press ahead of Ramazan, the holy month of fasting, and Eid-ul-Fitr — the most difficult times for inflation-ravaged citizens — when overseas workers remit large amounts to Pakistan to support their loved ones.

There has been an improvement in dollar supply, but the country needs more liquidity to cope with the demand for imports.

Moreover, closing the gap between the open market and the interbank market is imperative to discourage the wholesale use of unofficial channels. 

Given its bare minimum foreign exchange reserves, Pakistan direly required dollar inflows that have not been very steady. 

Finance Minister Ishaq Dar said on Thursday Pakistan was “very close” to signing a staff-level agreement with the International Monetary Fund (IMF), which would offer a critical lifeline for taming a balance of payment crisis.

An agreement would release $1.1 billion to the cash-strapped South Asian economy.

“We seem to be very close to signing the staff level agreement, hopefully, God willing, in the next few days,” Dar said at a seminar in Islamabad.

“I and my team are absolutely committed to complete this program to the best of our ability,” he said, adding: “We have been in the review and I think it has taken longer than it should have in my opinion.”

Islamabad has been hosting an IMF mission since early February to negotiate the terms of a deal, including the adoption of policy measures to manage its fiscal deficit ahead of the annual budget due around June.

The funds are part of a $6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations.

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In January 2025, RDA inflows reach 9.564 billion USD.

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Remittances under the Roshan Digital Account (RDA) increased from US $9.342 billion at the end of 2024 to US $9.564 billion by the end of January 2025.

The most recent data issued by the State Bank of Pakistan (SBP) revealed that remittance inflows in January totaled US$222 million, compared to US$203 million in December and US$186 million in November 2024.

Millions of Non-Resident Pakistanis (NRPs), including those who own a Non-Resident Pakistan Origin Card (POC), desire to engage in banking, payment, and investing activities in Pakistan using these accounts, which offer cutting-edge banking options.

Nearly 778,697 accounts were registered under the scheme by the end of January 2025, according to the data.

By the end of January, foreign-born Pakistanis had contributed US $59 million to Roshan Equity Investment, US $479 million to Naya Pakistan Certificates, and US $799 to Naya Pakistan Islamic Certificates.

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FBR lowers Karachi’s built-up structure property valuation rates

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A year-by-year breakdown of the depreciation value of residential and commercial built-up properties is included in the updated property valuation rates for Karachi that the FBR has announced.

The notification said that built-up structural values on residential property will be gradually reduced.

A residential home’s built-up structure, which is five to ten years old, will lose five percent of its worth.

In a similar vein, constructions between the ages of 10 and 15 will lose 7.5% of their value, while those between the ages of 15 and 25 would lose 10%. Built-up structures that are more than 25 years old will be valued similarly to an open plot.

Furthermore, age will also be used to lower the valuation of built-up properties, such as apartments and flats.

Structures that are five to ten years old will depreciate by ten percent, while those that are ten to twenty years old will depreciate by twenty percent. A 30% depreciation will be applied to properties that are 20 to 30 years old, while a 50% reduction will be applied to those that are above 30 years old.

In terms of commercial built-up properties, buildings that are 10 to 15 years old will lose 5% of their value, while those that are 15 to 25 years old will lose 8%. The value of properties that are more than 25 years old will drop by 10%.

In contrast, there would be a 15% boost in the value of commercial properties in the Defence Housing Authority (DHA) that face any Khayaban.

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Remittances Increase 25.2% in January 2025: $3.0 Billion Inflow

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Remittances from Pakistani workers totalled US$3.0 billion in January 2025, representing a 25.2% increase from the previous year.

The cumulative remittances for July through January of FY25 were 20.8 billion dollars, up 31.7 percent from 15.8 billion dollars during the same period in FY24.

In January 2025, the United States of America contributed 298.5 million dollars, the United Kingdom contributed 443.6 million dollars, the United Arab Emirates contributed 621.7 million dollars, and Saudi Arabia contributed 728.3 million dollars.

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