Remittances soar to all-time high in FY21

Register fastest growth since FY03 to amount to $29.4 billion

KARACHI:

The amount sent home by overseas Pakistanis in fiscal year 2020-21 registered the fastest growth in past 18 years and rose to an all-time high of $29.4 billion while playing a leading role in boosting country's foreign currency reserves and improving its capacity to make international payments for imports and foreign debt repayments.

"On a cumulative basis, remittances rose to a historic high of $29.4 billion. This helped improve the country’s external sector position despite the challenging global economic conditions in the past year," the State Bank of Pakistan reported on Tuesday.

To recall, the country's foreign exchange reserves climbed to over four-year high at $17.23 billion in the week ended July 2, 2021, the central bank said in its latest weekly update on Thursday.

Remittances registered a substantial growth of 27% in FY21 over the previous year which was the fastest rate of expansion since FY03, it said.

The inflows surged 9% to $2.7 billion in June 2021 compared to the same month last year while on a month-of-month basis, they recorded an increase of 8% compared to May 2021.

"Seasonal pre-Eid related inflows helped give a boost to remittances during June," the State Bank of Pakistan (SBP) said adding that remittances maintained the unprecedented streak of remaining over $2 billion a month for a record 13th successive month in June.

Remittance inflows during FY21 were mainly sourced from Saudi Arabia (at $7.7 billion), United Arab Emirates ($6.1 billion), United Kingdom ($4.1 billion) and the United States ($2.7 billion).

"Overall, record high inflow of workers’ remittances during FY21 was driven by proactive policy measures by the government and SBP to incentivise the use of formal channels, curtailment of cross-border travel in the face of Covid-19 infections and altruistic transfers to Pakistan amid the pandemic," the central bank said.