Trend Continues; Remittances from Overseas Pakistanis remain above $2bn

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Trend Continues; Remittances from Overseas Pakistanis remain above $2bn

• In aggregate, remittances rose to an unprecedented $11.8 billion during Jul-Nov FY21, 26.9pc higher than the same period last year.

Ali Ahmed Updated 11 Dec 2020
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Continuing with the trend, remittances sent home by overseas Pakistanis remain above $2 billion mark for the 6th consecutive month.
As per the State Bank of Pakistan (SBP), workers’ remittances maintained their strong momentum in November, remaining above $2 billion for a record sixth consecutive month. They rose to $2.34 billion, showing an increase of 2.4 percent over the previous month, while compared to the same period last year increased by 28pc.

As per the central bank data during the first five months of FY21, workers’ remittances have reached an unprecedented level of US$ 11.77 billion, 26.9 percent higher than the same period last year.
On average, workers’ remittances have been about half a billion (US$ 499 million) higher in each month of FY21 as compared to the same period last year.
Remittance inflows during the first five months of FY21 have mainly been sourced from SaudiArabia ($ 3.3 billion), United Arab Emirates ($ 2.4 billion), United Kingdom ($ 1.6 billion) andUnited States ($ 1.0 billion).
SBP was of the view that this significant growth reflects continued government and SBP efforts to formalize remittances under Pakistan Remittances Initiative (PRI), growing use of digital channels amid limited international travel, orderly exchange market conditions and improved global economic activity.

Despite the COVID-19 pandemic, Pakistan's workers' remittances have managed to post strong growth, back in October home remittances sent by overseas Pakistan amounted to $ 2.3 billion, increasing by 14.1pc compared to October 2019.
Since June the country is receiving over $2 billion in home remittances monthly. In June, remittances amounted to $2.47 billion were arrived, while the country received highest-ever workers' remittances $2.76 billion in July.

InshaAllah we will record a surplus this month as well.

 

[N.Siddiqui]

One reason is the disruption in Hundi/Hawala transactions due to the air flights cancellations to the Arab/Other countries and overseas Pakistanis are sending their money through proper Banking/Moneygram/Western Union channels.

And people have lost jobs but a larger number of people have migrated to these countries....



One possible cause could be the greater use of digital money transferring mechanism by overseas Pakistanis. The government, with the SBP, has over the past year made efforts to make digital payments convenient and less costly. The minimum amount to avail the inexpensive bank transfer facility under the Pakistan Remittance Initiative was lowered to $200. Banks were also given incentives to provide better remittance services. In addition, anti-money laundering regulations are making the use of informal means such as Hundi riskier. The combined effect of these policy changes may be reflected in greater officially-recorded remittances even if the total foreign exchange received in the country might not have increased.


A second cause could be the record number of Pakistani workers who went abroad in 2019. According to the Bureau of Emigration and Overseas Employment, 563,018 Pakistanis went overseas for employment in 2019 compared to 382,439 in 2018, registering a massive increase of 47%. This increase should inevitably show in higher remittances.

 

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A breakdown of growth.