Less and less non-resident Pakistanis sending money back home as frayed economy continues to struggle

Islamabad: In a major setback for Pakistan amid severe economic crisis, remittances sent home by overseas Pakistani workers plunged to more than a two-year-low, as per the data released by the State Bank of Pakistan (SBP). The remittances fell to a 31-month low as the dollar cap, which was earlier imposed to stabilise the Pakistani rupee against the US dollar by the government, prompted illegal transfers through hundi, hawala, and other channels, Geo News reported. Compared to $2.1 billion in December and $2.18 billion in January 2022, the remittances fell to $1.9 billion in January 2023, the data showed. Back in May 2020, remittance stood at $1.865 billion. As per SBP data, remittances dropped 9.9 per cent month-on-month and 13.1 per cent year-on-year basis. In the month of January, remittances were mainly sourced from Saudi Arabia ($407.6 million), United Arab Emirates ($269.2 million), the UK ($330.4 million) and the US ($213.9 million), reports said. ‘Dollar Cap’ Last month, the Exchange Companies Association of Pakistan (ECAP) had decided to remove the cap on the US dollar from January 25. By January end, the dollar cap was removed as per International Monetary Fund (IMF) conditions to pave the way for the release of the critical $1.1 billion loan tranche. IMF is yet to approve its ninth review to release $1.1 billion, which was originally due to be disbursed in November 2022. It wants Shahbaz Sharif-led government to cut subsidies, slash energy sector debt and levy more taxes to reduce the budget deficit, and make the transition to a market-based exchange rate. The Pakistani government, in November 2022, announced to limit the amount of foreign currency purchased per person and capped the outflow of remittances to $50,000 annually. Pakistan - January CPI rises 27.5% year-on-year Earlier this month, it was reported that Pakistan’s consumer price index (CPI) rose 27.5 per cent year-on-year in January. Pakistan’s cash-strapped economy has reeled from a sharp currency deprecation and foreign currency reserves have fallen to cover just three weeks of imports, Reuters earlier reported. (With inputs from agencies) Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.