The repatriation of profits and dividends by foreign investors surged to $139.13 million in July 2024, a significant jump from the $2.16 million repatriated in the same month last year, according to data released by the State Bank of Pakistan (SBP).
This sharp increase follows the easing of foreign exchange controls by the SBP, which had been imposed during the previous fiscal year to conserve reserves.
Foreign companies repatriated $133.86 million in profits against foreign direct investments (FDI) in various sectors, compared to just $1.53 million in July 2023.
Additionally, repatriation from portfolio investments increased to $5.27 million in July 2024, up from $0.62 million in the same month last year.
The removal of restrictions on the outflow of foreign exchange, implemented following Pakistan’s agreement with the International Monetary Fund (IMF) on a $3 billion Standby Facility, has been a key factor in this substantial increase in repatriations.
Sector-wise, the highest repatriations were recorded from the power sector, where independent power producers (IPPs) operating in the thermal segment repatriated $28.3 million out of the $29.5 million total for the sector.
Other outflows included $22.1 million from the tobacco sector, $21.2 million from the transport sector, $16.1 million from financial businesses, and $13.5 million from the chemicals sector.
Despite an year-on-year increase, the outflow in July 2024 was 66.5% lower than the $414.5 million sent abroad in June 2024, reflecting a normalisation after clearing a backlog of repatriation requests from the previous fiscal year.
The increased repatriation coincided with a slight depreciation of the Pakistani rupee, which fell by Rs0.13 to Rs278.45 against the US dollar in the interbank market. The rupee had previously gained Rs0.34 over three consecutive days.
The currency has remained relatively stable within the range of Rs278-278.74 per dollar over the past five months, despite pressures from external financing uncertainties.
