Foreign companies operating in Pakistan have transferred more profit abroad than they have invested in the country, according to the latest data from the State Bank of Pakistan (SBP).
In the current fiscal year 2023-24, foreign companies have repatriated $2.21 billion in profits, significantly outpacing their investments, which amounted to $1.5 billion. This trend marks a notable increase compared to the previous fiscal year 2022-23, with profits transferred abroad being 23 times higher than before.
The SBP report highlights that in June 2024 alone, foreign companies repatriated $410 million in profits. The financial business sector led this outflow, transferring $640 million, the highest among all sectors.
Experts attribute this substantial profit repatriation to the government's recent relaxation of the dollar repatriation policy, which has facilitated easier transfer of earnings by foreign entities.
The State Bank's findings underscore the significant financial dynamics at play, raising questions about the balance of foreign investments and profit repatriations in Pakistan's economic landscape.
Meanwhile, the State Bank of Pakistan (SBP) has announced a 1% reduction in the interest rate, bringing it down from 20.5% to 19.5%.
This decision was made during a meeting of the Monetary Policy Committee (MPC) held on Monday, as revealed by the governor of the State Bank, Jameel Ahmed. The reduction comes in response to the continuously decreasing inflation rate, according to the SBP's latest assessment.
Governor Ahmed said the interest rates and economic indicators will be reviewed again in September. He said the domestic foreign exchange reserves were stable, and the foreign exchange reserves were improving despite external payments.
