Inflow of workers’ remittances clocked in at $2.72 billion in August, an increase of 7.9% on a monthly basis, according to data released by the State Bank of Pakistan (SBP) on Tuesday.

Inflows amounting to $2.724 billion arrived during August 2022 compared to $2.523 billion in July, an increase of $200 million or 7.9% on a month-on-month basis.

Remittance inflow declines 8.6% month-on-month in July, stands at $2.52bn

On a year-on-year (YoY) basis, an improvement of nearly 1.5% was witnessed in August 2022. Remittances stood at $2.68 billion in August 2021.

“This is not a big improvement, as there were fewer working days in July due to Eid holidays and this was normalised in August,” Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited, told Business Recorder.

“In September, remittance figures are expected to improve further amid flood-related inflows."

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, foreign exchange reserves held by the SBP rose $1.1 billion, clocking in at $8.8 billion as of September 2, 2022, following receipt of the $1.12-billion loan tranche from the International Monetary Fund (IMF).

Total liquid foreign reserves held by the country stood at $14.5 billion, said the SBP on Thursday. Net foreign reserves held by commercial banks amounted to $5.7 billion.

Breakdown of remittances

Saudi Arabia remained the most significant contributor to workers’ remittances with $692 million in August 2022, up from $581 million or 19% recorded in July.

On the other hand, inflows amounted to $531 million from the United Arab Emirates, registering an increase of 17%. An inflow of $370 million was recorded from the United Kingdom, while $294 million came from the US.