In May, the remittances sent by overseas Pakistani workers experienced a 4% month-on-month decrease and a 10% year-on-year decline, amounting to $2.1 billion.
As per the recent data released by the State Bank of Pakistan (SBP), the country has faced a loss of $3.7 billion in remittances during the first 11 months of FY23, primarily due to a widening exchange rate gap.
Exports plunged by $3.491 billion, or 12%, to $25.380 billion during July-May of FY23 compared to $28.871 billion in the same period of the last year.
The inflows for the 11-month period of FY23 totaled $24.831 billion, marking a significant decrease of 12.98% compared to the $28.489 billion received in the corresponding period of the previous fiscal year. With foreign exchange reserves of less than $4 billion, Pakistan’s management of the external account becomes more challenging, particularly as it strives to secure a $1.1 billion tranche from the International Monetary Fund (IMF).
In May, Pakistan received $2.102 billion in remittances, down from $2.198 billion in April. In comparison to May of the previous year, there was a decline from $2.346 billion to $2.102 billion.
Currency dealers have consistently urged the government to address the factors contributing to the decline in remittances, particularly the growing influence of the grey market, which has effectively replaced exchange companies.