January foreign remittances at 31-month low, clock in at $1.9bn

The inflow of overseas workers’ remittances continued to decline in Pakistan, clocking below the $2 billion mark for the first time in 31 months at $1.9 billion in January 2023, a drop of 13% on a year-on-year basis.

According to data released by the State Bank of Pakistan (SBP) on Monday, the inflow of remittances stood at $2.18 billion in the same month of the previous year.

The $1.894 billion remittance inflows recorded in the first month of 2023 are the lowest since May 2020. The January 2023’s figure is also the fifth successive month-on-month decline.

On a month-on-month basis, remittances fell 10% as they amounted to $ 2.102 billion in December 2022. On a cumulative basis, the inflow of remittances during the July to January period of the fiscal year 2022-23 stood at $16 billion, 11% lower than $17.98 billion in the same period of the previous fiscal year.

Remittances down 19% year-on-year, clock in at $2.04bn in December

“Black market impacted the remittances flow in January 2023, but still not a bad number, given huge gap between official and black market rate,” said Ismail Iqbal Securities Limited in a note.

“Should improve going from February onwards,” added the brokerage house.

A significant decline in remittance was mostly observed in inflows coming from GCC countries.

Remittances from the United Arab Emirates amounted to $269 million during the month, a decline of 30% compared to $382 million in January 2022.

Overseas Pakistanis in Saudi Arabia remitted the single largest amount in January as they sent $408 million during the month. This was nearly 26% lower than the $549 million sent by expatriates in the same month of the previous year.

Jul-Dec remittances fall 11pc to $14.1bn YoY

Inflows from the United Kingdom inched up 2% as they increased from $324 million in January 2022 to $330 million in January 2023.

Moreover, remittances from the European Union remained largely stable as they amounted to $240 million in January 2023. Overseas Pakistanis in the US sent $214 million in January 2023, registering a year-on-year increase of 1%.

As per SBP's latest weekly report, the total liquid foreign reserves held by the country stood at $8.54 billion as of February 3, 2023 compared to $8.74 billion as of Jan 27, 2023.

During the week under review, SBP’s reserves decreased by $170 million to $2.918 billion due to external debt repayments. The SBP’s reserves can cover the import of two weeks.