KARACHI: The pace of increase in remittances showed no signs of easing as Pakistanis working abroad sent home $1.1 billion in July, which was higher by 38.57 per cent or $305.13 million when compared with $791.18 million received during the same period last year, reveals data released by the State Bank of Pakistan (SBP) on Wednesday.
This was the fifth consecutive month when expatriate workers remitted over $1 billion. They remitted $1.05 billion, $1.03 billion, $1.05 billion and $1.10 billion in March, April, May and June respectively.
According to analysts, strict restrictions on the illegal money transfer system called Hundi and Hawala have led overseas Pakistanis to opt for formal banking channels for sending money back home to their relatives. About a decade ago after 9/11 attacks, the government launched a crackdown on illegal money transfer to check misuse of foreign exchange.
Banks have also become efficient and offered incentives for swift and easy processing of remittances. In this regard, the State Bank, Ministry of Finance and Ministry of Overseas Pakistanis undertook a joint initiative called Pakistan Remittance Initiative a few years ago to facilitate the flow of remittances through formal channels.
“This initiative has shown remarkable progress as remittances through formal channels have beaten all previous records,” SBP said.
BMA Capital Group Head of Equities Hamad Aslam pointed out that Ramazan was another factor which caused an increase in remittances as expatriates sent more money than usual to their dear ones ahead of Eid as well as for payment of Zakat.
He said the rupee had also remained stable and had not dropped sharply, which encouraged people to continue sending higher amount of remittances.
In the last fiscal year ended June 2011, remittances surged 26 per cent to a record level of $11.2 billion.
According to the breakdown of SBP data for July, inflow of remittances from Saudi Arabia, UAE, USA, UK, Gulf Cooperation Council (GCC) countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $291.83 million, $257.65 million, $194.87 million, $118.55 million, $116.45 million and $32.59 million respectively.
In the same month last year, inflow from these countries stood at $194.94 million, $177.03 million, $143.86 million, $85.57 million, $101.25 million and $23.85 million respectively.
Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries amounted to $84.37 million against $64.68 million in the first month of the last fiscal year.
Published in The Express Tribune, August 11th, 2011.