Remittances rise 11.9pc to $10.6 bn in July-October FY2022

KARACHI: Remittances from Pakistani workers employed abroad increased 11.9 percent to $10.6 billion in the first four months of the current fiscal year, the central bank has said.

The country received $2.5 billion in remittances in October, a 10.2 percent rise year-on-year, but down 5.7 percent as compared with the previous month. The July-October remittances’ data shows these flows remain buoyant since last year, providing much-needed support to the country, which has struggled with a higher current account deficit and a depreciating currency.

The SBP said that the workers’ remittances continued their strong streak. “In addition to remaining above $2 billion since June 2020, this is the eighth consecutive month when remittances have been close to or above $2.5 billion,” it said in a statement.

Remittance inflows during the first four months of the FY2022 have mainly been sourced from Saudi Arabia ($2.7 billion), UAE ($2 billion), UK ($1.5 billion) and US ($1.1 billion), it added. There are a number of factors that contributed to the surge, especially the increasing use of the official channels for sending money by the overseas Pakistanis due to security and convenience.

The altruistic transfers to Pakistan and the limited travel of expatriates to Pakistan due to the Covid-19 pandemic had also resulted in more funds’ transfers through the legal channels and supported the rise in the remittances. However, the decline in month-on-month remittances is attributable to the resumption in the international air travel amid ease in lockdowns and a rise in vaccination. Many countries have ended the pandemic travel ban, opening doors to the international visitors and tourists. So, it looks the expatriates from the main sources of remittances, such as the Middle East, the United Kingdom, and the United States have restarted travelling activities.

It is widely assumed that instead of sending cash through banks and exchange companies, they are visiting Pakistan to meet their families and relatives and bring money with them. “Ease in travel restrictions and a rising gap between interbank and kerb dollar rate are the main reasons,” said Mohammed Sohail, CEO at Topline Securities, referring to the fall in remittances in October, compared with September.

Samiullah Tariq, the head of research Pak-Kuwait Investment Company said non-resident Pakistanis sent less money in October due to lack of any religious festival and resumption of flights. “I don’t think the remittances would face decline, they would still grow on a year-on-year basis,” he said. The remittances should be close to $31 billion in FY2022, Tariq predicted. Remittances rose to $29.4 billion in FY2021 from $23.13 billion a year ago.