KARACHI: Remittances from overseas Pakistanis have doubled during the last 10 days of Ramazan, keeping the hope alive for the country to fetch around $2 billion during the holy month.

The flood of dollars through banking channel and exchange companies produced a fine equilibrium between the interbank and open market where dollar price remained steady around Rs99 with marginal fluctuations during the month.

However, this stability is not because of higher remittances alone; the rising reserves of the State Bank also played key role to keep the dollar pegged below Rs100. However, for all practical purposes, it was a seller’s market all through past month.

“During the last 10 days dollar inflows have doubled and the rush to sell the US currency has also been rising each day,” said Exchange Companies Association of Pakistan Malik Bostan. The daily market of $4 million to $5m has gone up to $8m-$10m, he added.

He said that while it was impossible to tell the exact figure, market activities show the inflows were very high.

The average 11 per cent increase in the remittances used to become double during Ramazan but the currency experts at the beginning of this month were expecting an additional $600m-$700m that can take the total to $2bn.

The country has been receiving monthly remittances of $1.3bn on average. In FY14, the country received $15.8bn.

Market experts said the increased inflows of dollars eradicated the price difference between the two markets. Dollar rates in the open market were Re1 higher than the inter-bank market in March this year.

Another ‘B’ category exchange company said the dollar was traded at Rs99 in the open market on Saturday. It also echoed the sentiment that inflows were very high in the last days of Ramazan.

Dollars are coming from many channels including banks, money changers, T.T., and individuals.

Not only because of high spending due to Ramazan and Eid, the charity has also a very significant place in remittances during the holy month.

Banks know that remittances are growing fast but they are unable to tell the size of the surge as each bank has its own collection.

The central bank, which could provide the total collection, is expected to calculate the inflows after the end of Ramazan.

Published in Dawn, July 27th, 2014