KARACHI: The State Bank of Pakistan (SBP) has eased up the repatriation of profits and dividends on foreign investments, as a result the outflow in January rose to $127 million.

For over a year, the SBP has been under serious criticism in and outside the country for imposing restrictions on the outward remittance of profits on foreign investment, which fell sharply during FY23.

The SBP data on Tuesday showed that the repatriation of profits and dividends swelled to $694.3 million during the first seven months (July-January) of FY24 compared to just $220.5 in the same period last year.

Informed sources in the financial sector said the IMF has objected to restrictions and asked the government to allow 100pc profit outflows.

They believe the improvement in profit outflows is a sign of the acceptability of the IMF’s condition.

In the next few months, the government would have to approach the IMF for the release of the last tranche of $1.2bn under the current Stand-By Arrangement and start negotiations for a new bailout package.

The higher outflows were from manufacturing with $185.8m and $196.8m for wholesale and retail during the July-January period. The financial and insurance noted an outflow of $84.4m, transport $78.1m and electricity $92m.

Published in Dawn, February 28th, 2024