Despite pandemic, remittances rise 4.6% in May
Inflows stand at $1.87b compared to $1.79b in April
Inflows stand at $1.87b compared to $1.79b in April. PHOTO: REUTERS
KARACHI:
Contrary to market expectations, remittances sent home by overseas Pakistanis rose 4.6% to $1.87 billion in May 2020 despite the coronavirus pandemic coupled with global lockdowns.
Pakistanis working in foreign countries had remitted $1.79 billion in April 2020, according to data released by the State Bank of Pakistan (SBP) on Friday.
The encouraging inflows may help the rupee to strengthen against the US dollar in the short run and also contribute positively to the external account.
The growth in receipts is led by Middle Eastern countries where a majority of the Pakistani expatriates reside.
Talking to The Express Tribune, BMA Capital Executive Director Saad Hashmi termed the rise in remittances a positive development for the country.
“The data of remittances for May exceeded market expectations and the country should take it as a positive sign,” he said. “The industry expected a drop in remittances on the back of global slowdown caused by the coronavirus pandemic.”
According to Hashmi, the encouraging inflows will bode well for the country’s external account. He added that Eidul Fitr played a significant role in the increase in remittances.
MAFA Capital CEO Muzammil Aslam said remittances came in contrary to expectations in May 2020 because of the month of Ramazan and Eidul Fitr.
“In addition to this, illegal channels (Hundi/Hawala) have stopped operating during the lockdown, hence, expatriate Pakistanis are left with no option but to send money through official channels,” he said.
In the first 11 months (July-May) of current fiscal year, the remittances amounted to $20.65 billion, which was higher by 2.7% or $551.5 million compared to $20.10 billion in the same period of previous fiscal year.
However, on a year-on-year basis, workers’ remittances dropped 18.6% compared to May 2019 when inflows stood at $2.3 billion.
“During this pandemic, job losses for overseas Pakistani workers and the closure of international borders remain the main factors affecting the flow of remittances,” the SBP said in a statement. “Moreover, last year, the whole month of Ramazan fell in May.”
Country-wise data
Expatriate Pakistanis in Saudi Arabia sent home the highest amount of $436.2 million in May 2020, however, it was 3.4% less than the $451.37 million received in April 2020.
Pakistanis living in the US sent $428.3 million during the month, up 6.6% compared to $401.9 million in the preceding month.
Remittances received from the UAE dropped 8.6% to $323.4 million from $353.7 million. Inflows from the UK rose 25.7% from $226.61 million in April 2020 to $284.8 million in May 2020.
Remittances from the rest of the Gulf Cooperation Council (GCC) countries (including Bahrain, Qatar, Kuwait and Oman) inched up from $153.35 million to $155.05 million.
Pakistanis from Europe sent home $57.95 million in May, up 43.16% compared to $40.48 million in April.
Contrary to market expectations, remittances sent home by overseas Pakistanis rose 4.6% to $1.87 billion in May 2020 despite the coronavirus pandemic coupled with global lockdowns.
Pakistanis working in foreign countries had remitted $1.79 billion in April 2020, according to data released by the State Bank of Pakistan (SBP) on Friday.
The encouraging inflows may help the rupee to strengthen against the US dollar in the short run and also contribute positively to the external account.
The growth in receipts is led by Middle Eastern countries where a majority of the Pakistani expatriates reside.
Talking to The Express Tribune, BMA Capital Executive Director Saad Hashmi termed the rise in remittances a positive development for the country.
“The data of remittances for May exceeded market expectations and the country should take it as a positive sign,” he said. “The industry expected a drop in remittances on the back of global slowdown caused by the coronavirus pandemic.”
According to Hashmi, the encouraging inflows will bode well for the country’s external account. He added that Eidul Fitr played a significant role in the increase in remittances.
MAFA Capital CEO Muzammil Aslam said remittances came in contrary to expectations in May 2020 because of the month of Ramazan and Eidul Fitr.
“In addition to this, illegal channels (Hundi/Hawala) have stopped operating during the lockdown, hence, expatriate Pakistanis are left with no option but to send money through official channels,” he said.
In the first 11 months (July-May) of current fiscal year, the remittances amounted to $20.65 billion, which was higher by 2.7% or $551.5 million compared to $20.10 billion in the same period of previous fiscal year.
However, on a year-on-year basis, workers’ remittances dropped 18.6% compared to May 2019 when inflows stood at $2.3 billion.
“During this pandemic, job losses for overseas Pakistani workers and the closure of international borders remain the main factors affecting the flow of remittances,” the SBP said in a statement. “Moreover, last year, the whole month of Ramazan fell in May.”
Country-wise data
Expatriate Pakistanis in Saudi Arabia sent home the highest amount of $436.2 million in May 2020, however, it was 3.4% less than the $451.37 million received in April 2020.
Pakistanis living in the US sent $428.3 million during the month, up 6.6% compared to $401.9 million in the preceding month.
Remittances received from the UAE dropped 8.6% to $323.4 million from $353.7 million. Inflows from the UK rose 25.7% from $226.61 million in April 2020 to $284.8 million in May 2020.
Remittances from the rest of the Gulf Cooperation Council (GCC) countries (including Bahrain, Qatar, Kuwait and Oman) inched up from $153.35 million to $155.05 million.
Pakistanis from Europe sent home $57.95 million in May, up 43.16% compared to $40.48 million in April.