Remittances exceed $2 billion for third month in a row
Remittances rose to $2.095 billion in August, according to data released by the State Bank of Pakistan (SBP), depicting a year- on- year growth of 24.4pc when compared with August 2019.
On a monthly basis, however, remittances were 24.3pc lower than the $2.768 billion remittances posted in July 2020. According to the SBP, this monthly decline reflected the usual seasonal decline in the post Eidul Adha period.
Most of the remittances in August were received from Saudi Arabia, at $593 million; followed by UAE at $410 million; and the UK at $302 million.
According to the SBP, workers' remittances have now remained above $ 2 billion for the third month in a row. In July, remittances were recorded at $2.77 billion, which was the highest ever level of remittances in a single month in Pakistan. And in June, remittances were recorded at $2.47 billion, which the SBP had dubbed as ' historic' at the time.
"Over the last three months, remittances reached an unprecedented level of $7.3 billion, 37.2pc higher than the same period last year," the SBP noted.
According to the SBP, the rise in remittances is due to two reasons.
First, there has been increased efforts under the Pakistan Remittances Initiative (PRI). Under the PRI, the threshold for eligible transactions was changed from $200 to $100 under the Reimbursement of Telegraphic Transfer ( TT) Charges Scheme, there has been an increase in adoption of digital channels, and a push for targeted marketing campaigns to promote formal channels for sending remittances.
Second, there has been a gradual re- opening of businesses in major host countries such as Middle East, Europe and United States.
It is a view echoed by analysts. According to Tahir Abbas, head of research at Arif Habib Ltd., there has been an increase in remittances flows though formal channels.
Samiullah Tariq, head of research at Pakistan Kuwait Investment, also said that more overseas
Pakistanis are using official banking channels to remit money to their homes, as there was a closure of flights and restriction of movement due to the Covid-19 pandemic.
Typically, money is sent to Pakistan by people physically carrying cash in their luggage, when they travel to visit Pakistan. However, due to the Covid19 pandemic, and the subsequent cancellation in flights, people were forced to switch to formal channels, in an effort to make sure money reached their families.
In addition, the movement of cash transported on flights increases during Hajj and Umrah season. But this year, due to the Covid- 19 pandemic there was a limited Hajj, and a bank on Umrah, which further curtailed people's ability to send money through informal channels, and pushed them to use formal channels.
Meanwhile, Prime Minister Imran Khan said remittances received by the country have increased by 31pc during the first two months of the fiscal year as compared to the same period last year.