Remittances fall 8.7pc to $1.47bln in March

KARACHI:  Pakistanis living abroad sent less money home in March compared with the same month a year ago, the central bank said on Tuesday.

The State Bank of Pakistan (SBP) said inflows of workers’ remittances declined 8.7 percent to $1.47 billion during the month of March 2016 as compared with around $1.6 billion in the same month of last year.

Analysts said migrant cash flows, which are a lifeline for the country’s foreign currency reserves, are expected to weaken more in the coming months as the weak Arabian gulf economy due to slump in oil prices hits Pakistan workers living there.  A weakening in the construction and services sectors in the Middle East is weighing particularly heavily on Pakistani migrants. New job rules and expected levies could further hit inflows in near future.

 “The global economic slowdown has impacted the transfer of remittances by the overseas Pakistanis,” said Ahasan Mehanti at Arif Habib Corp.

The breakup of data for the month revealed inflows from UAE, USA, UK and GCC Countries including Bahrain, Kuwait, Qatar and Oman posted decline. However, inflows from Saudi Arabia increased to $506.05 million during the month as compared with $489.7 million in the corresponding month last year. The inflows from EU countries were remained intact at $26.54 million.  Remittances from Norway, Switzerland, Australia, Canada, Japan and other countries also increased in March 2016 to $120.92 million as against $91.51 million received by the central bank in March 2015.

The fall in March 2016 also eased the growth of overall remittances inflows during first nine months of 2015/2016 to $14.15 billion as compared with $13.59 billion in the corresponding months of last fiscal year.

During fiscal year 2014/2015 the overseas Pakistani workers sent $18.45 billion, showing 16.5 percent growth as compared with $15.83 billion in the preceding fiscal year.

Analysts expect the rupee could lose some ground to the greenback in the coming months if the inflows trend remains the same. The current account could get smaller via lower remittances and drive the rupee weaker, so the fundamentals may change, they added.

In past months better inflows from the overseas Pakistanis helped the central bank to improve its reserves, along with soft oil prices that saved a substantial amount on account of import bill.  The country’s total foreign current reserves stood at 20.885 billion on the week ended April 1. The central bank held $16.078 billion, while commercial banks have a total of $4.807 billion of foreign currency reverse.