Inflow of workers’ remittances stood at $2.52 billion in July, the first month of fiscal year 2022-23, registering a decline of 8.6% on a monthly basis.

According to data released by the State Bank of Pakistan (SBP) on Tuesday, inflows amounting to $2.523 billion arrived during July 2022 compared to $2.761 billion in June, a decrease of $238 million or 8.6% on a month-on-month basis.

On a year-on-year (YoY) basis, a decline of nearly 8% was witnessed in July 2022. Remittances stood at $2.74 billion in July 2021.

“This was due to considerably fewer working days because of Eid holidays,” said the SBP in a note.

"The daily average rate of remittances was 18% higher in July (17 days) than in June (22 days)," the SBP added.

Remittances: Pakistan receives record inflow of $31.2bn in FY22

Remittances are a crucial component of the economy for Pakistan which has seen its foreign exchange reserves deplete due to external debt servicing. With exports not nearly matching the high amount of imports, Pakistan relies on the inflow of remittances to meet its foreign exchange needs.

Last week, the SBP’s reserves fell another $555 million, clocking in at an alarming level of $7.83 billion as of August 5, 2022, as policymakers in the country continued to scramble over securing dollar inflows and provide breathing room to the economy.

Total liquid foreign reserves held by the country stood at $13.56 billion, said the SBP on Thursday. Net foreign reserves held by commercial banks amounted to $5.73 billion.

Breakdown of remittances

Meanwhile, Saudi Arabia remained the most significant contributor to workers’ remittances with $580.58 million in July 2022, down from $666.43 million recorded in June.

On the other hand, inflows amounted to $456.17 million from the United Arab Emirates, registering a decline of 8%. An inflow of $411.67 million was recorded from the United Kingdom, while $254.3 million came from the US.