Remittances rise 11.9% to $10.6 billion in July-October FY2022

KARACHI: Remittances from Pakistani workers employed abroad increased 11.9% to $10.6 billion in the first four months of the current fiscal year, according to the data released by the State Bank of Pakistan (SBP).

The country received $2.5 billion in remittances in October, a 10.2% rise year-on-year, but down 5.7% 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 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 to send money by 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 legal channels and supported the rise in remittances.

However, the decline in month-on-month remittances is attributable to the resumption in international air travel amid an ease in lockdowns and a rise in vaccination. Many countries have ended the pandemic travel ban, opening doors to international visitors and tourists. So it looks like expatriates from the main sources of remittances, such as the those in Middle East, the United Kingdom, and the United States have restarted travelling.

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 inter-bank 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 at 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 will face decline. They will 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.

Originally published in The News