KARACHI: Overseas Pakistanis sent $7.79 billion remittances in the first half (July-Dec) of this fiscal year registering a growth of 9.46 per cent over a year earlier, the State Bank reported on Friday.

The ever increasing remittances have given great support to the sharply falling foreign exchange reserves which lost $412 million during the week ending Jan 3, 2014.

The half-yearly inflows are highly encouraging to help the government which is struggling to keep paying back its debts, support the weakening exchange rate and build the reserves even with the help of borrowed money to a reasonable level.

The details of the State Bank of Pakistan showed the traditional sources of remittances were the main reason for the rise in the remittances.

Pakistan is among the major countries which receive large amount of remittances like $13.9bn in FY13.

While the country is ready to accept bitter pills attached with International Monetary Fund loans recently agreed for $6.6bn to stabilise the economy, the workers’ remittances, which are free of all conditions, jumped by $1.5bn in just two years. The half-yearly (July-Dec) total of remittances in FY12 was $6.3bn.

Highest amount and highest increase were noted in remittances from Saudi Arabia which was $2.203bn with an increase of $243m during the first half of this fiscal year.

Remittances from the United Arab Emirates were $1.57bn (a rise of $112m), $1.25bn from the United States (a rise of $93m) and $1.139bn from the United Kingdom (up $104m).

The monthly average inflow rose to $1,298m compared to six-month average of last year’s $1,186m.

Researchers and analysts indicated that the country requires more strength on two fronts to deal with the uncertainty on external fronts including the exchange rate regime.

They said the current account deficit has been rising while the reserves of the State Bank have not shown strength enough to convince foreign exchange experts that exchange rate would not see another jolt as it felt in most of the first half of the current fiscal.

The current account deficit of the first five months rose to $1.885bn which was 200pc more than last year’s deficit of the same period.

“The foreign exchange market is reasonably stable but it is difficult to predict that how long it will remain in this position. Low reserves and higher current deficit could change this situation any time in future,” said Atif Ahmed, a currency dealer in the inter-bank market.