Pakistan Economy_Remittances continue to tumble, (AKD Daily, Dec 15, 2022)
As per the data released by the State Bank of Pakistan (SBP), the country’s monthly remittances posted a decline of 5%MoM and 14%YoY to close in at US$2.1bn. This took the total remittance inflow during 5MFY23 to US$12bn, down 10%YoY.
Declines in inward flow of remittances were seen across all the major host countries during Nov’22 with the greatest declines coming from the two largest markets of KSA and UAE, each posting double digit declines on MoM basis.
Earlier, as per the data released by PBS, the country’s trade balance was reported at US$2.9bn as imports posted a sequential increase of 11.3%MoM. Not withstanding the difference in reported numbers of SBP and PBS, the Current Account Deficit for Nov’23 is likely to settle around US$900mn—US$1.0bn mark, taking the cumulative CAD during the period to US$3.8bn.
With Pakistan having to contend with a booming black market of currency exchange, which also offers far more lucrative rates, the flow of inward remittances through official channels was inevitably going to fall. Unless, the authorities are able to decrease the spreads between the open and black markets, the remittances inflow will likely continue to fall short of expectations.
The currency will continue to face major headwinds in the coming months as the trade imbalances and debt repayments will continue to hammer reserves position. Country recently honored its repayment commitment by retiring international sukuk with a maturity of ~US$1.08bn, which took the reserves position below US$7.0bn mark, less than 1.3x of monthly imports cover.
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AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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