Remittances stay strong despite incentives cut

Remittances sent by overseas Pakis­tanis have remained robust despite the rationalisation of incentives for banks and exchange companies. According to the State Bank of Pakistan (SBP), remittance inflows in the first two months of FY26 rose by 7pc, dispelling fears that a reduction in incentives would lead to a decline in remittances. In August, remittances totalled $3.137 billion, showing a 6.6pc year-on-year increase. However, the monthly inflows saw a slight decline of 2.4pc compared to July, when they were $3.214bn. While the growth in the first two months of FY26 is positive, it pales in comparison to the remarkable growth witnessed during the same period last fiscal year. Remittances surged by 44pc in 2MFY25 compared to FY24. This extraordinary growth contributed to a record annual total of $38.3bn, which helped maintain exchange rate stability and allowed the SBP to increase its foreign reserves by $7.8bn, reaching $14.5bn.