By Staff Reporter
KARACHI: Pakistan’s overseas workers sent home $3.89 billion in October, up 13.8% from a year earlier, giving the central bank a larger foreign-currency cushion just as it fights an inflation upswing tied to the Middle East conflict.
The State Bank of Pakistan said Tuesday that inflows compared with $3.42 billion in October 2025 and were 8.5% higher than September’s $3.6 billion. For the first four months of the fiscal year that began in July, remittances totaled $14.8 billion, 14% more than the $13 billion received a year earlier.
“These sustained inflows are strengthening Pakistan’s foreign exchange position, supporting households and reinforcing external-account stability,” Khurram Schehzad, an adviser to the finance minister, said on X.
Remittances are one of the main sources of foreign currency for Pakistan, helping to finance imports and adding to the disposable income of the households that receive them. The central bank projects imports of about $71 billion this fiscal year against exports of $32.5 billion to $33 billion, and it expects the current account deficit to stay between 0% and 1% of gross domestic product, after a $874 million shortfall in the first quarter.
The latest figures follow a policy decision that tilted toward caution. On Oct. 26, the central bank raised its benchmark rate by 50 basis points to 12%, with nine of 10 Monetary Policy Committee members in favor, citing elevated global energy prices and the risk that higher fuel costs feed into broader inflation. Headline inflation was 10.3% in September, well above the 5% to 7% medium-term target range, while core inflation was running near 8.4%. The bank’s reserves were steady at about $21.5 billion at the time of the decision, equal to roughly three months of import cover.
At the press conference that followed the decision, Governor Jameel Ahmed said remittances had stayed resilient in the first quarter of fiscal 2027 and were on course to exceed the bank’s earlier assessment. Pakistan received $10.9 billion in remittances in the July-September period.
“Workers’ remittances are expected to increase further, with Pakistan’s inflows projected at $45 billion in the current fiscal year, up from the previous estimate of $44 billion,” he said.
Hitting that figure would require about $30.2 billion over the remaining eight months of the fiscal year, or roughly $3.8 billion a month. October’s total was above that pace. Monthly data from the central bank show inflows over the 12 months through October totaling about $43.4 billion.
Saudi Arabia was again the largest source, with $982 million sent in October. That was up 17% from $838 million a year earlier and 9% from $899 million in September. Inflows from the United Arab Emirates rose 16% from a year earlier to $816 million, from $703 million, and were up 9% from $749 million in September. The two Gulf economies together accounted for about 46% of the month’s total.
Remittances from the U.K. totaled $592 million, 19% more than the $499 million sent in October 2025. Workers in the U.S. sent $329 million, up 9% from $301 million a year earlier and 8% from $306 million in September. Inflows from European Union countries were $461 million, 3% higher than September’s $448 million.
Policy changes may also be helping. The central bank has introduced the Pasban Remittance Reward Scheme, which offers 16 billion rupees in annual prizes to encourage the use of formal banking channels. A beneficiary must receive the equivalent of at least $100 a month in a bank account for three consecutive months within a quarter to qualify. The first qualifying period runs from Oct. 1 to Dec. 31, with the first draw set for Jan. 15. Ahmed said the program was expected to support inflows in the coming months.
The external backdrop has also eased somewhat. Pakistan moved closer to another $1.21 billion in International Monetary Fund financing last month after the lender and Pakistani authorities reached a staff-level agreement on the fourth review of a 37-month Extended Fund Facility and the third review of a 28-month Resilience and Sustainability Facility, subject to approval by the IMF’s executive board.
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