Continued influx of remittances is providing significant relief to Pakistan's foreign exchange reserves, strengthening liquidity, and reducing pressure on external debt


(Web Desk): Pakistan's remittance inflows have reached a historic high of $3.1 billion in February 2025, marking a significant 55% year-on-year increase compared to $2.3 billion in the same month last year.
This surge highlights the ongoing contribution of overseas Pakistanis, who continue to play a pivotal role in supporting the country's economy and external accounts.
The increase in remittances has provided crucial support to Pakistan's foreign exchange reserves, reducing external vulnerabilities and contributing to economic stability. Saudi Arabia, the UAE, the UK, the EU, and the US were among the largest contributors to this remarkable growth.
Key Contributors to Remittance Growth:
Saudi Arabia remained the largest source of remittances, sending $744 million in February 2025, a reflection of the sizable Pakistani workforce in the Kingdom and the importance of strong bilateral labor relations.
The UAE contributed $652 million, aided by improved banking channels and a favorable exchange rate environment.
The UK sent $501 million, demonstrating the strong engagement of the Pakistani diaspora and the success of policies encouraging formal remittance channels.
EU nations and the US sent $340 million and $309 million, respectively, showcasing the diversity of remittance sources and the importance of engaging Pakistani expatriates across multiple regions.
Month-on-month, remittances showed a steady rise, with a 4% increase compared to January 2025’s $3.0 billion. This stability reflects the continued trust that overseas Pakistanis have in Pakistan’s financial system and the impact of government policies aimed at encouraging remittances through formal channels.
Surge in Cumulative Remittances for Jul-Feb FY25:
The cumulative remittances for the first eight months of fiscal year 2025 (Jul-Feb FY25) have reached a record $24 billion, marking a 32% increase from $18.3 billion in the same period last year. This growth highlights the continued resilience of remittance inflows and their growing significance in the country’s economic landscape.
Government Initiatives Fueling Remittance Growth:
Government efforts, such as the introduction of Roshan Digital Accounts, have been instrumental in reducing informal money transfers and encouraging the use of formal remittance channels. These initiatives, along with incentives for legal remittance methods, have made it easier for Pakistanis abroad to send money back home securely and efficiently.
Additionally, favorable exchange rate policies have made official remittance channels more attractive by offering competitive rates. The rise of digital financial services has further streamlined the process, ensuring faster, more secure transactions and making the remittance process less reliant on informal systems.
Economic Impact:
The continued influx of remittances is providing significant relief to Pakistan's foreign exchange reserves, strengthening liquidity, and reducing pressure on external debt. It has also lowered the country’s reliance on external borrowing, easing Pakistan’s dependence on international loans. Furthermore, the stability brought by remittances has bolstered investor confidence, making Pakistan's economy more resilient and attractive to both local and foreign investors.

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