Profit repatriation by foreign investors increased by 161 % to reach $567.7 million in the first half (July-Dec) of the current fiscal year FY 2023-24.
State Bank of Pakistan (SBP) data revealed that multinational companies (MNCs) in Pakistan and foreign investors in the stock market repatriated $35.4 million in profits and dividends to their home countries in December, marking a contrast to the $46.8 million repatriated during the previous month.
The surge in profit repatriation from foreign direct investment (FDI) was particularly pronounced, escalating to $521.4 million in July-December FY24 from $182.8 million during the same period in the preceding fiscal year.
Similarly, profits and dividends from portfolio investments also saw an increase, amounting to $46.3 million in the first half of the current fiscal year compared to $34.8 million in the corresponding period a year ago.
The rise in repatriated earnings is primarily due to MNCs accumulating profits and dividends following the SBP facilitation of foreign currency transfers to overseas headquarters, driven by improvements in inflows.
In a recent report, the IMF emphasized the importance of maintaining a market-determined exchange rate to mitigate external shocks, rebuild SBP’s forex reserves, and foster economic growth.
The IMF stressed the need to restore public confidence in the exchange rate system and deepen the foreign exchange market, highlighting the significance of ensuring unrestricted repatriation of profits and dividends to attract high-quality FDI.
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