KARACHI: Workers’ remittances rose by 8.4 per cent year-on-year to $9.5 billion in the first quarter of FY26, exceeding government and market expectations, the State Bank of Pakistan (SBP) reported on Thursday.

During the same period last year, remittances totalled $8.8bn. The government had projected around 5pc growth for the full fiscal year, making the current trend encouraging amid stagnant exports and limited foreign investment.

In September alone, inflows stood at $3.183bn — an increase of 11.3pc compared to $2.859bn in Sept FY25, and slightly higher than August’s $3.138bn.

While the 8.4pc growth this quarter is below the 38.9pc increase recorded in Q1FY25, it reflects more stable remittance behaviour following last year’s post-Covid surge and exchange rate volatility.

Saudi Arabia remained the top source of remittances, with inflows rising 7.2pc to $2.311bn during July-Sept FY26, compared to $2.157bn in the same period last year. However, this growth is significantly lower than the 42.3pc recorded in Q1FY25. Currency market analysts are hopeful that improving trade relations and prospective Saudi investments may support the external account and stabilise the rupee.

Remittances from the UAE increased 19.85pc to $1.985bn, although still slower than the 67.3pc growth seen last year. Inflows from the UK showed marginal growth of 1.9pc, with $1.368bn received, compared to 41.7pc growth in the corresponding period of FY25.

The only major decline came from the United States, where inflows dropped 10.5pc to $806 million. In the same quarter of FY25, remittances from the US had grown by 17.2pc. Meanwhile, inflows from EU countries totalled $1.28bn, and from GCC countries $899.5m.

Despite strong remittance inflows of nearly $38bn in FY25 and continued growth this fiscal year, Pakistan remains in talks with the IMF over the next loan tranche. If approved, Pakistan may receive a disbursement of $1.2bn, contingent on the lender’s assessment of reforms and fiscal measures.

SBP reserves

The foreign exchange reserves of the State Bank increased by $20m to $14.42bn during the week ending Oct 3. Though the SBP has slowed its dollar purchases from the interbank market, reserves have been rising steadily and are approaching levels last seen at the end of FY25.

The country’s total liquid foreign exchange reserves stood at $19.81bn, including $5.39bn held by commercial banks.

Published in Dawn, October 10th, 2025