The remittances sent home by overseas Pakistanis soared to an all-time high of $8.04 billion year-on-year in the July-September quarter of current fiscal year, aided by efforts of the government and State Bank of Pakistan (SBP) to encourage expatriates to use formal money transfer channels.
According to data released by the SBP on Friday, the inflow of remittances accelerated 12.5% in the first quarter of fiscal year 2021-22 over the same period of last year.
“Proactive policy measures taken by the government and SBP to incentivise the use of formal channels and curtailed cross-border travel in the face of Covid-19 have contributed positively to the sustained improvement in remittances since last year,” the central bank said in a statement.
In addition to that, altruistic transfers to Pakistan amid the pandemic and orderly foreign exchange market conditions lent further support to the uptrend.
A report of Arif Habib Limited stated that the remittances received in July-September 2021 were the highest ever for any quarter in Pakistan’s history.
Speaking to The Express Tribune, Arif Habib Limited Head of Research Tahir Abbas stated that remittances had been on the rise since Covid-19 struck Pakistan in February 2020.
“Cumulatively, in fiscal year 2020-21, the overseas Pakistanis remitted $29 billion to Pakistan,” he said. “If the quarterly trend is sustained, the country will receive $32 billion in remittances in full fiscal year 2021-22.”
He cherished that the steps taken by the government and State Bank to discourage overseas Pakistanis from using illegal channels for sending remittances back home were bearing fruit.
Recently, the Economic Coordination Committee (ECC) approved incentives for remittances under the National Remittance Loyalty Programme (NRLP).
Under the scheme, the overseas Pakistanis would get points by sending their earnings back home, which they could use to avail several services, he said.
Terming the quarterly data encouraging, he voiced a firm hope that Pakistan would receive over $32 billion in remittances in FY22.
READ Country receives $2.7b in remittances
Echoing his views, Pak-Kuwait Investment Company Head of Research Samiullah Tariq said that the growth in remittances came on the back of Covid-related travel restrictions, which forced Pakistanis residing abroad to use legal channels to send money to their families in Pakistan.
“Moreover, digitalisation has made it easier for expatriates to remit their earnings, hence they are using digital channels,” he said.
Finally, the crackdown on Hundi/ Hawala system coupled with the measures taken to curb money laundering drove the growth in remittances, Tariq said.
BMA Capital Executive Director Saad Hashmey called the remittances data a positive development and said that it was better than market expectations.
He noted that the surge in receipts would support the external account and help the country cope with the widening trade deficit.
According to him, it will also ease pressure on the rupee and help it recover against the US dollar. “It will prove vital for stabilising the rupee value.”
According to the central bank, Pakistanis based in Saudi Arabia sent the largest amount of remittances at $2.02 billion in July-September 2021, but it was 2% lower than the $2.08 billion received in the same period of last year.
Expatriates in the United Arab Emirates sent home $1.54 billion during the quarter under review compared to $1.42 billion in the same quarter of previous year, an increase of 8.7%.
Receipts from the UK stood at $1.12 billion, which were 13.2% higher than the remittances of $985.5 million in the July-September period of last year.
Pakistanis in the US sent $836.1 million in July-September 2021 against $632.8 million in the same quarter of previous year, an increase of 32%.
Receipts from Gulf Cooperation Council (GCC) countries, other than the UAE and Saudi Arabia, amounted to $880.7 million, up 12.3% compared to $784.4 million in the same period of last year.
Published in The Express Tribune, October 9th, 2021.
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