Rise in remittances.

THE slight increase in remittances sent home by Pakistani migrants during February is a healthy development for a country battling a full-blown economic crisis characterised by decades-high inflation, dwindling reserves and industrial closures. The market is expecting a further spike in remittances around Ramazan and Eid. The State Bank's February data shows that remittances - a lifeline for a country struggling to stave off the risk of default as foreign financing dries up thanks to the delay in the IMF deal - have surged by 5pc after hitting a 32-month low in January. Nonetheless, remittances in the first eight months of this fiscal year dropped by nearly 11pc to $17.99bn year-over-year. Market players blame the situation on the large black market for foreign currency, the outcome of an unannounced cap on the exchange rate and import restrictions imposed by the government and the central bank to decelerate dollar outflows. The cap is believed to have made it more profitable for migrant workers to send money through illegal channels, due to the massive difference between the official and black market dollar rates. The removal of controls on the exchange rate last month under IMF pressure is helping boost remittances through legal channels.

The exchange rate cap is undoubtedly the...