KARACHI: Remittances from overseas Pakistanis, the country’s most reliable source of foreign exchange, remained strong in November, raising hopes the government will be able to manage a widening current account deficit.

The State Bank of Pakistan (SBP) reported on Monday that remittances grew 9.4 per cent year-on-year to $3.2 billion in November, a trend that has remained intact since the beginning of the current fiscal year.

“Cumulatively, with an inflow of $16.1bn, workers’ remittances increased by 9.3pc during Jul-Nov FY26 compared to $14.8bn received during the same period last year,” it added.

In the wake of declining exports, the importance of remittances has further increased. The government is seeking to send more workers abroad, particularly to the Middle East, in the hope of securing higher inflows in the coming months and years.

However, hundreds of thousands of Pakistanis have left the country due to rising poverty and to seek jobs abroad, a trend experts criticise as a “brain drain”. At the same time, at least nine multinational companies have exited Pakistan, reflecting growing unease among foreign investors.

Inflows hit $16.1bn in first five months of FY26

Experts say the government is chasing remittances rather than pursuing a durable strategy to keep trade and current account balances under control. Most of the remittances, which the government expects to reach about $40bn this fiscal year, are likely to be used to narrow the trade deficit and current account gap.

Remittances also provide dollars to the State Bank, which is a regular buyer from the market for partial payments of external debt servicing. The bulk of the external debt is typically rolled over. Saudi Arabia recently rolled over $3bn for another year.

The SBP data shows that the highest remittances came from Saudi Arabia, with inflows rising 6.8pc to $3.902bn during July-November. During the same period last year, the growth from the kingdom had exceeded 36pc.

The second-highest inflows came from the UAE, totalling $3.363bn, a growth of 14pc compared to 55pc in the same period of last year.

Other major corridors included the UK ($2.384bn), the US ($1.385bn), EU countries ($2.118bn), and other GCC states ($1.544bn).

Higher remittance inflows have helped keep the exchange rate broadly stable for more than a year, providing some comfort to both importers and exporters.

Some exporters argue that the rupee is overvalued against the US dollar, citing the greenback’s recent weakness against major international currencies and stressing that there is room for a controlled depreciation to encourage exports. However, the SBP has so far shown little inclination to move in that direction.

Published in Dawn, December 10th, 2025