KARACHI: Repatria­tion of profits and dividends by multinational companies swelled more than five times in the first two months of the current fiscal year, reflecting the ease of restriction-free dollar outflows amid stability on the external account front.

The State Bank of Pakistan (SBP) reported on Thursday that the profits outflow reached $274.7 million during July-Aug FY25 against $49.2m in the corresponding period last year.

The first half of the previous fiscal year was highly disappointing for foreign investors since the outflow of profits was extremely poor, but the second half witnessed much improvement. At the end of FY24, the total outflows were $2.12 billion against $331m in FY23.

The outflow in August was $135.6m compared to $139.1m in July, while it was $415m in June due to the clearance of many payments at the end of the fiscal year.

The details show that the highest profit outflow of $59.6m was from financial businesses (banks) in 2MFY25 compared to $3.7m in 2MFY24.

The outflows from the tobacco and cigarettes sector were $43.1m, followed by $34.9m from food, $36m from transport and $32m from the power sector. The repatriation of profit from these sectors was zero during the first two months of FY24.

The country-wise details show that the highest amount of $93.2m was remitted to the United Kingdom. China is the largest investor, but the profit outflow to the country was the lowest at $20.5m in 2MFY25. The profits for the UAE were $33.1m, the US $32.5m, and France $30.6m.

The SBP’s restrictions on dollar outflows during FY23 and FY24 drew severe criticism from MNCs, and eventually, the IMF had to intervene, paving the way for higher outflows. The policy badly damaged the country’s image abroad and hurt foreign investment.

SBP reserves rise

The foreign exchange reserve held by the SBP increased by $24m to $9.533bn during the week ended on Sept 20.

The country’s total reserves rose to $14.873bn, including $5.339bn held by the commercial banks.

The SBP reserves provide the country an import cover for 1.6 months.

Published in Dawn, September 27th, 2024

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

First line of defence

First line of defence

Pakistan’s foreign service has long needed reform to be able to adapt to global changes and leverage opportunities in a more multipolar world.

Editorial

Eid amidst crises
Updated 31 Mar, 2025

Eid amidst crises

Until the Muslim world takes practical steps to end these atrocities, these besieged populations will see no joy.
Women’s rights
Updated 01 Apr, 2025

Women’s rights

Such judgements, and others directly impacting women’s rights should be given more airtime in media.
Not helping
Updated 02 Apr, 2025

Not helping

If it's committed to peace in Balochistan, the state must draw a line between militancy and legitimate protest.
Hard habits
Updated 30 Mar, 2025

Hard habits

Their job is to ensure that social pressures do not build to the point where problems like militancy and terrorism become a national headache.
Dreams of gold
30 Mar, 2025

Dreams of gold

PROSPECTS of the Reko Diq project taking off soon seem to have brightened lately following the completion of the...
No invitation
30 Mar, 2025

No invitation

FOR all of Pakistan’s hockey struggles, including their failure to qualify for the Olympics and World Cup as well...