Remittances set another record in Dec

Country received $2.4b as overseas Pakistanis increasingly used formal channels

KARACHI:

Remittances received by the country from overseas Pakistanis set another record in December 2020 as inflows stood above $2 billion for the sixth consecutive month.

According to data released by the State Bank of Pakistan (SBP) on Friday, the amount sent home by expatriate Pakistanis reached $2.4 billion, up 16.2% on a year-on-year basis and 4.2% month-on-month.

“I want to thank our overseas Pakistanis for yet another record breaking month of remittances in December with $2.4 billion sent home,” said Prime Minister Imran Khan in a tweet on Friday.

“This is the first time when remittances have been above $2 billion for six consecutive months in Pakistan.”

He added that the total amount received in the first six months of current fiscal year came in at $14.2 billion, higher by 24.9% compared to the corresponding period of previous fiscal year.

According to a statement issued by the SBP, the strong growth in workers’ remittances was witnessed due to enhanced use of formal channels on the back of sustained efforts by the government and central bank to encourage inflows through official channels.

It pointed out that limited cross-border travel in the wake of second wave of Covid-19 pandemic coupled with favourable foreign exchange market dynamics was lending additional support.

Recently, the government of Pakistan introduced a number of initiatives to ramp up remittances through official channels and crack down on the illegal Hundi/ Hawala operators.

Alpha Beta Core CEO Khurram Schehzad said that remittances had remained on the higher side for a long time primarily because overseas Pakistanis were using formal channels to remit money rather than informal channels due to limited travel amid Covid19 restrictions.

“It is also partly due to the transfer of savings of laid-off overseas workers, who will be leaving foreign countries to settle back in Pakistan,” he said.

“But still a large proportion of increase in remittances is on the back of shift towards formal channels.”

He projected that the uptrend would continue for the next few months. “Remittances are expected to remain high at least till the Covid-related restrictions persist,” he said.

“Authorities need to sustain this increase by implementing favourable policies.” Echoing his views, Tangent Capital Advisers CEO Muzammil Aslam said since inward travel was largely restricted, expatriates were forced to send money through formal channels, which was adding to Pakistan’s remittances figure.

Moreover, he said, the State Bank was aiding the shift towards formal channels by offering competitive exchange rates, which was further encouraging people to utilise legal channels to send money back home.

Country-wise figures In December 2020, the largest amount of remittances was received from Saudi Arabia as Pakistanis residing in the Middle Eastern nation sent $624.8 million compared to $577.1 million in December 2019, a rise of 8.3%.

It was followed by the UAE as expatriates remitted $511.6 million last month as opposed to $504.4 million in the same month of 2019.

Remittances received from the UK soared 42.7% to $326.9 million in December 2020 against $229 million in December 2019.

Pakistanis in the US sent back $203.2 million during the month under review, which was 27.7% higher than the $159.2 million sent in the corresponding month of 2019. Remittances sent home by Pakistanis living in the rest of GCC countries fell 1.5% to $278.7 million in December 2020.

Remittances from the region had been at $283 million in December 2019. The highest jump in remittances came from EU countries as Pakistanis living there sent 63% more remittances at $246 million. The amount received from the region had been just $150.7 million in December 2019.