$2.5 billion was a 7-month high for remittances in March.
In March, remittances from Pakistanis living abroad reached a seven-month high of $2.5 billion, presumably as a result of Ramadan and Eid ul Fitr.
According to figures released on Monday by the State Bank of Pakistan (SBP), the amount of remittances received by employers was 27% greater 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 substantial as non-resident Pakistanis used authorized routes to send money to their family members as a result of the closing spread between interbank and open market rates.
Head of research at Pakistan-Kuwait Investment Company Samiullah Tariq described the uptick as a “good omen,” adding that there was little to no difference between the kerb and interbank prices.
In contrast, this year Ramadan began earlier, which is why remittance inflow surged earlier than previous year, he said. “Remittances number is highest for past seven months.”
Historical patterns showed that prior to the annual Eid holidays, Pakistanis living abroad sent record-high remittances.
The remittances are expected to “further improve due to positive seasonal and Ramadan factor,” according to the Ministry of Finance.
According to the central bank’s monthly remittance bulletin, the total amount of remittances received for the first nine months of the fiscal year 2022–23 was $20.5 billion, a 10.8% reduction over the same time the previous year.
It should be highlighted that the likelihood of a current account surplus has significantly risen since remittances have significantly outpaced the Pakistan Bureau of Statistics (PBS) trade deficit figures this month.
The SBP trade deficit data point should be highlighted as being typically smaller than the PBS trade deficit.
The Ministry of Finance also noted in its monthly forecast report that, given the economic variables influencing the figures, the current account deficit is projected to stay on the lower side.