All-time high: Remittances soar above $3b for first time

Business Desk
A currency dealer counting $100 notes. — Reuters/File
A currency dealer counting $100 notes. — Reuters/File

  • Inflows jump 12% to $3.12b in April 2022 from $2.79b in April 2021.
  • "Workers' remittances cross $3b for the first time ever," SBP reports.
  • Analyst says inflows increased during Eid season.

KARACHI: Pakistan created history in April 2022 as the receipt of workers’ remittances exceeded expectations by a staggering 12% to a record high of $3.12 billion compared to $2.79 billion in April 2021.

The receipt of much-needed foreign exchange in these testing times when a geopolitical and economic crisis had engulfed Pakistan pushed total remittances to an all-time high at $3.1 billion in the previous month ended April 30, the State Bank of Pakistan (SBP) reported on Friday.

“With $3.1 billion inflows during April 2022, workers' remittances crossed $3 billion for the first time ever,” the central bank said.

On a month-on-month basis, remittances increased by 11.2%. Meanwhile, on a cumulative basis, remittances amounted to $26.1 billion during the first 10 months of the fiscal year 2021-22, a 7.6% year-on-year increase.

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Remittances started improving after global travel came to a standstill during the peak of COVID-19. That development also disrupted the network of illegal hawala/ hundi operators, who used to offer a better price to the remittance senders compared to the one offered by the official channels like banks.

Alpha Beta Core CEO Khurram Schehzad said that the significant increase is attributed to the Eid season, as “expatriates send more money during Eid days”.

He further said that due to soaring inflation, overseas Pakistanis have increased the amount that they send in order to support their families.

Going forward, the analyst predicted that the growth momentum would continue. However, he added that a slight slowdown would be noticed as central banks have started raising interest rates across the world “which would slow down the pace of remittances.”

Schehzad further added rising oil prices would support inflows, which have remained above $2 billion since June 2020.

Country-wise data

Pakistanis residing in Saudi Arabia remitted $707.2 million in April 2022. It was 4.33% higher than the $677.8 million received in March 2022.

Expatriates in the UAE sent home a 19.21% higher amount as receipts rose from $515.1 million to $614.1 million.

Remittances from the overseas Pakistanis in the UK rose 20.72% to $484.1 million. They had sent $401 million in March 2022.

Read more: Pakistan's foreign exchange reserves plunge to lowest level since Dec 2019

The inflows increased 4.6% to $358.9.1 million from other GCC countries (Bahrain, Oman, Kuwait and Qatar) compared to $343.1 million in the previous month.

They rose 6.46% to $298.2 million from the European Union during April against $280.1 million in March.