Outflows jump almost 21 times in October

Repatriation of profit and dividends on foreign investments surged almost 21 times year-on-year to $272.5 million in October, indicating the State Bank of Pakistan has relaxed the tighter controls on dollar outflows. Currency market experts said the outflow of half a billion dollars during the first four months of 2023-24 would surely undermine the efforts of the central bank to keep the foreign exchange reserves at a reasonable level. The SBP reported on Tuesday that the outflow of profits and dividends in Oct was $272.5m against $163.7m in September, $47m in August and $2.1m in July. The October outflow was a 39-month high as the repatriation of profits was $354m in July 2020. Data showed the outflow of profits during July-October FY24 was $485.4m against $71m in the same period of the preceding fiscal year, an increase of almost seven times. During the entire FY23, the outflow of profits was $331m. The government and the SBP restricted the outflow since the foreign exchange reserves had plunged to below $3bn in February. The reserves increased after the first tranche of $1.2bn under the IMF’s nine-month $3bn Stand-By Arrangement was released in July. The UAE and Saudi Arabia also helped to build the SBP’s reserves to $8.138bn by the end of July.