By Staff Reporter
KARACHI: Foreign investors repatriated $592.7 million in profits and dividends in the first two months of Pakistan’s current fiscal year, more than doubling the $274.7 million recorded in the same period last year, central bank data revealed on Friday, reflecting improved corporate profitability and easing restrictions on capital outflows.
The State Bank of Pakistan (SBP) reported that in August alone, overseas investors transferred $348.7 million back to their home countries, up from $244 million in July. The repatriation of profits and dividends from foreign direct investment (FDI) surged to $591.4 million in July-August of fiscal year 2026 (FY26), compared with $268.1 million in the same period of the previous fiscal year.
However, earnings repatriated from foreign portfolio investments dropped sharply to $1.3 million from $6.6 million a year earlier. The power sector led the surge in repatriation, driven by enhanced cash flows as the government implemented reforms to tackle circular debt and create fiscal space, according to the SBP.
The sector recorded outflows of $167.9 million in July-August FY26, a significant rise from $32.8 million in the same period last year. Financial businesses followed, with repatriations of $135.4 million, while the communications sector saw outflows of $66.8 million, up from $5.4 million a year ago.
By country, Chinese investors repatriated the largest share, sending $205.6 million back to the mainland in July-August FY26, a tenfold increase from $20.5 million in the same period last year. Companies from the United Arab Emirates repatriated $96.5 million, slightly up from $93.2 million a year earlier.
The rise in repatriation comes as Pakistan’s foreign exchange reserves have strengthened, bolstered by robust remittances and support from an International Monetary Fund (IMF) loan programme. The SBP’s foreign exchange reserves stood at $14.357 billion as of September 12, with the central bank projecting reserves to reach $15.5 billion by the end of December 2025.
The central bank had previously imposed tight restrictions on dollar outflows during fiscal year 2023 and the first half of fiscal year 2024 to preserve foreign exchange reserves amid economic challenges. However, the improved reserve position has prompted the SBP to ease these restrictions, allowing greater capital outflows.
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