Pakistan’s remittances hit all-time monthly high

Remittances from Pakistani workers employed abroad exceeded a record $3 billion in April, the central bank said on Friday as the country’s foreign reserves dwindled to $16.37 million due to external debt payments.

“Remittances in April (were) $3.1 billion..., crossing $3 billion for the first time ever,” the State Bank of Pakistan said in a statement.

The surge in remittances have been critical in restraining rises in the current account deficit though it has swelled to $13.1 billion in the first nine months of fiscal year 2022.

In terms of growth, remittances in April increased by 11.2% on a month-on-month basis and 11.9% year-on-year.

Cumulatively, at $26.1 billion, remittances grew by 7.6% during the first 10 months of fiscal year 2022, compared with the 2021 fiscal period, the central bank statement said.

Pakistan is in dire need of external financial support due to a widening current account deficit with foreign reserves down to $10.37 million held by the central bank as of May 6 - equivalent to less than two months of imports.

Another $6.06 million in foreign reserves was held by commercial banks as of last week.

Prime Minister Shahbaz Sharif took over last month after a parliamentary no-confidence vote ousted his predecessor Imran Khan, who was blamed for mishandling the economy.

Sharif’s government, however, has yet to implement reform policies such as curtailing costly energy subsidies, which were introduced by Khan’s government in his last days in power as he faced mounting pressure over soaring inflation.