Saudi Arabia tops remittance inflows as Pakistan receives $3.1bn in August

KARACHI: Overseas Pakistanis sent USD 3.1 billion in remittances in August 2025, the State Bank of Pakistan (SBP) said on Monday.

Workers’ remittances rose 6.6 per cent year-on-year during the month, according to the SBP. In July, inflows stood at USD 3.214 billion, up 7.4 per cent compared with the same month last year.

Cumulatively, remittances reached USD 6.4 billion in the first two months of FY26, up 7 per cent from USD 5.9 billion in the corresponding period of the previous year.

Saudi Arabia remained the top source of inflows with USD 736.7 million, followed by the United Arab Emirates (USD 622.9 million), the United Kingdom (USD 463.4 million), and the United States (USD 267.3 million).

In FY25, Pakistan received a record USD 38.3 billion in remittances, up 27 per cent year-on-year. These inflows helped maintain dollar liquidity in the market, with the SBP reportedly purchasing about USD 9 billion from the open market during the year.

Meanwhile, the SBP injected a cumulative Rs316 billion into the financial system on Monday through conventional and Shariah-compliant Open Market Operations (OMOs) to ease liquidity pressure in the banking sector.

Of this, Rs238 billion was provided via a conventional four-day reverse repo OMO at an accepted rate of 11.07 per cent, while Rs78 billion was channelled through a Shariah-compliant Modarabah-based OMO at 11.14 per cent.

OMOs are a key liquidity management tool of the central bank. Injections are made when banks face funding shortages, with the SBP lending against government securities such as Market Treasury Bills and Pakistan Investment Bonds. For Shariah-compliant transactions, GOP Ijara Sukuk are used as eligible collateral.

Separately, the National Bank of Pakistan (NBP) held a corporate briefing to discuss its financial results for the first half of 2025, where management projected a steady earnings outlook despite regulatory changes and rising costs.

NBP said its deposits rose 21.7 per cent to Rs4.7 trillion in June 2025, compared with Rs3.9 trillion in December 2024. Most of the growth came from current deposits, lifting CASA (current and savings account) deposits to 82.9 per cent from 79.5 per cent six months earlier.

The bank reported that its agricultural loan portfolio stands at Rs120 billion, of which Rs50 billion is backed by gold. During the 2022 floods, non-performing loans in the agri book were just 1.5 per cent, indicating strong credit quality.

NBP also highlighted that its investment portfolio is heavily weighted toward government securities, with 53 per cent in floating-rate Pakistan Investment Bonds and 29 per cent in short-term T-bills. Eurobond and Sukuk investments total Rs70 billion, with a significant portion maturing in FY26.