By Staff Reporter
KARACHI: Pakistan’s central bank expects remittances from overseas workers to reach a record $44 billion in the fiscal year that began on July 1, while forecasting its foreign exchange reserves will exceed $20.2 billion by the end of December, Governor Jameel Ahmad said on Friday.”
Remittances have become a key pillar of Pakistan’s external finances, helping fund imports and support the currency. In the first 11 months of the fiscal year that ended in June, inflows totalled $38.1 billion, up 9.2% from the same period a year earlier. May saw the highest monthly inflow on record at $4.25 billion, with Saudi Arabia and the United Arab Emirates together contributing around $2 billion of that amount. The central bank expects remittances for the just-ended fiscal year to exceed $41.5 billion once all data is finalised.
Ahmad said the $44 billion projection for the current fiscal year would extend a period of strong growth supported by reforms to exchange companies and greater use of formal channels. “By the end of December 2026, our foreign exchange reserves will be more than $20.2 billion,” the governor told Arab News in an interview. This is higher than the previous target of $17.5 billion by June 2026, which Ahmad had outlined at the IMF-World Bank meetings in Washington last October. Over the past three years, the State Bank of Pakistan has purchased $20 billion from the interbank market to rebuild its reserves buffer.
Reserves fell by $1.3 billion in a single week in June due to external debt repayments, before recovering on inflows from multilateral lenders, according to central bank data. Pakistan’s bilateral debt stands at $14.5 billion, owed mainly to China, Saudi Arabia and other lenders.
Ahmad described the widening trade deficit as a major concern and said the government was focused on boosting exports to address it. He noted that economic growth of 3.7% appeared lower than expected, though the final reading for the year ending June could be revised higher. June inflation stood at 11.1%, but the average inflation rate for the fiscal year remained within the central bank’s 5-7% target range. “Due to the Middle East situation our inflation outlook deteriorated,” Ahmad said. “In coming months inflation will see improvement.” The current account recorded a surplus in the first 11 months of the previous fiscal year. The central bank expects the full-year current account balance to remain between 0% and 1% of GDP.
The positive remittance outlook comes as Pakistan has discontinued two incentive schemes designed to encourage formal remittance flows, in line with reforms backed by the International Monetary Fund. The State Bank of Pakistan this week ended the Telegraphic Transfer Charges Incentive Scheme (TTCIS) and the Sohni Dharti Remittance Program (SDRP) with effect from July 1. The TTCIS reimbursed banks and exchange companies for transfer charges, while the SDRP offered reward points to remitters through a mobile application.
Zafar Sultan Paracha, secretary general of the Exchange Companies Association of Pakistan, said the decision would save the government roughly 257 billion rupees. He described the TTCIS as a “revenue leakage and burden on the national exchequer.” Paracha said the move was unlikely to have any significant impact on remittance inflows. “With the number of Pakistanis going abroad … your remittance will increase,” he said.
A senior central bank official, speaking on condition of anonymity, said the schemes were no longer needed as the remittance market had matured. “The market will do it on its own,” the official said. “We will be on target next year as well.”
Pakistan has set a target of $42 billion in remittances for the current fiscal year.This version has a different lead, different paragraph structure, different transitions, and a more natural flow compared to the previous one I wrote. Let me know if you want any further changes.
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