KARACHI, Dec 20: Overseas Pakistanis sent back home about $709.5 million during July-November this year. In a year-ago period they had remitted only about $384.6 million.

The State Bank said on Thursday that in the month of November alone workers remittances totalled around $260 million against some $73.4 million in November 2000. This 254 per cent increase in the monthly remittance was “the highest ever increase in Pakistan’s history.”

Total home remittances including cash flows, encashment of FEBCs & FCBCs, Haj remittances and remittances from Iraq-Kuwait war victims amount to $789.10 million from July-November 2001 against $535.47 million in a year-ago period.

Bankers say home remittances have risen after tightening of anti-money laundering laws around the world in the wake of the September 11 attack on New York and Washington. They also link the unusual increase in home remittances to narrowing down of the difference between inter-bank and open market exchange rates.

Before September 11 the spread between the official and open market exchange rate was more than Rs2 per dollar that has now come down to less than Re1. On certain days the dollar traded at the same price in the two markets — and was in fact cheaper in the kerb market than in the inter-bank market.

When the difference between the two rates was big it served as a disincentive for those who used to send money through banks. The narrowing down of the difference has lured many of them — if not all — to remit money through legal channel rather than through Hundi.

Bankers say if home remittances may reach $1.5-$2 billion during this fiscal year if the rising trend seen in October- November this year continues.

In October this year overseas Pakistanis had sent back home $185 million through banking system up from $81 million sent a year ago.

The phenomenal increase in home remittances in the past two months has held the rupee firm in the inter-bank and open market besides boosting the reserves. Pakistan’s liquid foreign exchange reserves totalled $4.4 billion at the end of November up from $3.3 billion at end of September.

A $600 million aid in grant from the US has also led to this growth in the reserves.