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Foreign investors triple repatriated earnings in seven months

The foreign investors sent back $694.3 million in profits and dividends on their investments in

By Our Correspondent
February 28, 2024
This image shows US dollar banknotes. — AFP/File
This image shows US dollar banknotes. — AFP/File

KARACHI: Foreign investors in Pakistan more than tripled their repatriated earnings in the

first seven months of the 2023/24 fiscal year, as a rise in foreign exchange reserves easedcapital outflow restrictions, central bank data showed on Tuesday.

The foreign investors sent back $694.3 million in profits and dividends on their investments in

the country from July to January, up 215 percent from $220.5 million in the same period a year earlier, the State Bank of Pakistan (SBP) data showed.

Multinational corporations (MNCs) operating in Pakistan and foreign investors in the stock market repatriated $127 million in profits and dividends to their home countries in January. In comparison, the previous month saw the repatriation of $35 million in earnings.

The profit repatriation on foreign direct investment increased to $639.2 million in July-January FY24 , from $184.4 million during the same period of the last fiscal year. During the seven months of the current fiscal year, $55.1 million in profits and dividends from portfolio investments were paid out, compared with $36.1 million in the same period a year ago.

Due to an increase in foreign exchange reserves, the central bank permitted international companies to transfer foreign currency to their overseas headquarters, which has resulted in an increase in the repatriation of profits and dividends over the last three to four months. Pakistan's foreign reserves have increased significantly from a low of $2.9 billion in February 2023 to $8 billion as of February 16, indicating the country’s better external position.

The seamless repatriation of foreign investors' profits and dividends will contribute to the

restoration of investor confidence in Pakistan's economy and attract high-quality foreign direct investment.

The petroleum refining industry produced the biggest profit and dividend outflow, reaching $126.4 million between July and January FY24, according to SBP data. The power sector came in second with $91.6 million in repatriations in the seven months of the current fiscal year.

The food business came in third place with $85.1 million in outflows. Foreign investors' continued repatriation of profits and dividends will depend on the country’s stable external liquidity position.