KARACHI: The remittances sent by overseas Pakistanis tumbled 32 per cent in September 2011 over the preceding month breaking the flow of ever increasing monthly inflows for the last three months of this fiscal year.However, the first quarter's collective inflow of remittances was 25 per cent higher than the same period of last year.
The State Bank reported on Monday that remittances rose to $3.297 billion during the first quarter (July-September) of 2011-12 which was 24.6 per cent higher than previous year's $2.646 billion.
The remittances have become backbone of the economy as the country depends largely on it after export proceeds.
The fall in September remittances was substantially high as it fell by $420 million at $890 million against $1.3 billion sent in August, a shortfall of 32 per cent.
The policymakers are highly concerned about falling remittances as the country has lost other options for inflows of foreign exchange in the wake of souring relation with United States as most of the donor agencies including IMF are reluctant to provide loans.
On the other hand, the government will have to start paying back the IMF loans from February 2012.
It seems that the country would have to face tough situation regarding the foreign exchange reserves while its dependence on remittances would largely increase.
The monthly average remittances for the July-September period comes out to $1.099 billion as compared to $882 million during the same corresponding period of the last fiscal year, registering an increase of 24.60 per cent.
The State Bank said $890 million were remitted by overseas Pakistanis in September, down 3.43 per cent when compared with $922 million remitted in the same month last year.
While the bankers reported lower inflows, the currency dealers explained the situation in positive way by denying any large shortfall in remittances.
“Each month we surrender $300 to $400 million in banks which are included in the remittances but in September we surrendered only $85 million to banks because most of our dollars were purchased by intending hajis,” said Malik Bostan, Chairman Exchange Companies Association of Pakistan (ECAP).
The government has asked the intending pilgrims to buy their required dollars from open market which created a shortage and suddenly pushed up the demand causing higher prices of US dollar.
He also said because of Eidul Fitr remittances in August were very high since the overseas Pakistanis used to send more money at this occasion. The month of Ramazan also attracts high remittances due to Zakat and charity.
The country had been receiving over $1 billion per month for last three months which ended in September.