Remittances on the rise
Alarge number of the people of Pakistan are working in overseas countries to earn money for their self and their families. They are contributing a lot to support the country's economic condition at a time when most of the economic indicators, like the budget deficit and inflation are showing worsening trends, remittances sent home by the expatriates continue to give much needed support to the external sector of the country. The amount send by the overseas Pakistanis stood at $926.9 million during November, 2010 and it rises by 24.78 percent as compared to $742.9 million last year. Home remittances received during the month was the second highest in a single month, or only about $6 million less than the historic amount of $933.1 million received in August, 2010. Remittances during the five months have shown a steady growth of 15.54 percent, reaching $4.43 billion or $595 million more than received in the corresponding period last year. Healthy increase in the amount of remittances is more encouraging at a time of a global recession when employment opportunities for the expatriates and their earning potential are generally shrinking. Present rising trend in remittances could fetch the country about $10.5 billion during 2010-11 and contribute a great deal in reducing the current account deficit to a sustainable level. No doubt there is need of vigorous efforts to ensure the continuation of rising trend in overseas money. In this connection, credit is generally given to a joint initiative by the State Bank, Ministry of Finance and Ministry of Overseas Pakistanis, called the "Pakistan Remittance Initiative (PRI)," to facilitate the remittances. While such an initiative may have helped to increase the amount of home remittances to a certain extent, the more potent factors, in our view, could be the market determined exchange rate offered by the formal channels, a crackdown on money changers indulging in dubious business and a stringent monetary policy that has kept the domestic interest rates attractive, relative to the rates of return available in foreign countries. The government needs to monitor the situation and continue to improve the policy framework to exploit the full potential of foreign exchange.