Inward remittances hit a record high of $4.1 billion in March 2025 — the highest monthly figure ever recorded. This is more than double the average monthly inflow from five years ago. The previous record of $3.2 billion (set in May 2024) was surpassed by 26 percent.
No one in the analyst or banking treasury community saw this coming. BR Research spoke with several major banks, and all expressed surprise. Most had forecasted between $3.5 and $3.8 billion, based on relatively stable inflows — but the final figure exceeded even the most optimistic projections.
Seasonal factors did contribute — remittance inflows typically rise around Ramzan and Eid. This year, Ramzan fell entirely in March, concentrating the seasonal bump into a single month. That’s why some banks had estimated losses as high as $3.8 billion.
Preliminary April data suggests a slowdown. One bank reported that April inflows are nearly half of March’s volume, while another says inflows are 5–10 percent lower than February 2025 levels. Based on these signals, April remittances are expected to be around $3 billion.
Still, the March number is difficult to digest. Despite the surge in inflows, dollar liquidity remained tight, with banks scrambling to arrange foreign exchange for import payments. The SBP wasn’t buying as aggressively as it did in 2024 — evident from a $500 million decline in foreign exchange reserves during March.
One major bank said it is gaining remittance share by offering favorable rates, even at a loss — driven by the need to secure dollars to retire letters of credit (L/Cs), while SBP restricts access to the open market. This strategy, offering better rates than the diminishing gray market, has drawn inflows into the formal interbank system. If true, this would reduce banks’ forex and non-funded income in Q1CY25.
Overall, March inflows rose 30 percent month-on-month and 37 percent year-on-year, bringing the 9MFY25 cumulative figure to $28 billion — a 33 percent increase. The growth is broad-based: remittances from Saudi Arabia touched $987 million in March, up 33 percent from February. The UK posted the largest increase — 38 percent month-on-month — reaching $684 million.
Interestingly, the UAE showed a relatively moderate rise of 28 percent. Within that, Dubai’s remittances rose 20 percent to $665 million, while Abu Dhabi posted a striking 65 percent increase, reaching $151 million.
Still, it would be premature to draw long-term conclusions from one exceptional month. That said, the overall remittance trend this fiscal year remains strong. In 9MFY25, the UAE leads with a 55 percent increase (Dubai alone is up 64 percent to $4.5 billion), while remittances from Saudi Arabia rose 35 percent to $6.9 billion.
This growth is likely driven by a combination of increased overseas migration, a crackdown on the gray market, and the relaxation of import restrictions. The SBP projects remittances to reach $38 billion in FY25 and expects the current account to remain in surplus, with foreign reserves rising from $10.7 billion to $14 billion.
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