Remittances drop to lowest level since August 2020



2022-02-12 10:27:00

US greenback notes are seen at a Kasikornbank in Bangkok, Thailand, Could 12, 2016. — Reuters/File
  • Remittances in January decline by 5% year-on-year to $2.1 billion.
  • Inflows stay above $2bn for the twentieth consecutive month.
  • Remittances roar to their highest in July-January interval.

KARACHI: Remittances despatched house by abroad staff in January declined by 5% year-on-year to $2.1 billion — the lowest quantity of month-to-month remittances after August 2020, in accordance to analysts.

The inflows slumped 15% month-on-month; nevertheless, the State Financial institution of Pakistan (SBP) attributed a decline in January’s remittances to the easing of journey restrictions and seasonal components.

The central financial institution, nevertheless, reported that regardless of a lower staff’ remittances remained above $2 billion for the twentieth consecutive month.

— Arif Habib Limited
— Arif Habib Restricted

In the meantime, the inflows roared to their highest within the first seven months of the continuing fiscal 12 months 2021-22 (July-January), pushed by authorities efforts to encourage using official channels to switch cash, the central financial institution mentioned on Friday.

“During the first seven months of FY22, remittances rose to a record $18 billion, 9.1% higher than the same period last year,” mentioned the SBP in a press release.

Remittances, a significant supply for the nation’s international trade reserves and help for the low-income households, stayed sturdy aided by the federal government incentives to the expatriates for sending cash house by official channels and the crackdown on operators of unlawful sources like hundi and hawala.

Apart from, a rising variety of non-resident Pakistanis dwelling in varied international locations despatched more money to households again house to overcome the impression of the pandemic, which additionally prompted a surge in remittance flows.

These stable remittances have lent some help to the exterior present account, contributed to the buildup of foreign exchange reserves, and helped lower the federal government’s exterior financing necessities.

The inflows are primarily sourced from Saudi Arabia, United Arab Emirates, the UK, and the US, the central financial institution mentioned.

Remittances from Saudi Arabia rose 1.5% to $4.574 billion in July-January FY22.

Pakistani residents working within the UAE despatched house $3.382 billion within the interval below evaluation in contrast to $3.443 billion in the identical interval final 12 months.

Remittances from the UK rose 13.2% to $2.467 billion. The cash despatched house by migrant staff within the US stood at $1.701 billion, in contrast with $1.406 billion a 12 months in the past.

Analysts anticipate remittances to exceed the $30 billion mark in FY22.

The SBP along with the federal government has launched varied coverage measures, from time to time to improve the circulation of house remittances by formal channels.

Not too long ago, it has provided an incentive of Re1 per US greenback to trade corporations for surrendering 100% remittances within the interbank market.

The SBP expects this incentive will encourage trade corporations to deliver extra house remittances into the monetary system.


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