KARACHI: Inflow of remittances remained above $2 billion in January, helping the country to receive 24 per cent more remittances compared to the last financial year.

The latest data issued by the State Bank of Pakistan (SBP) on Monday indicated that it was the seventh straight monthly inflow of over $2bn, taking the total inflows during July-January FY21 to $16.476bn from $13.279bn, an increase of 24pc.

The country received $2.3bn in January FY21, which was 19pc higher than January FY20 but slightly lower than December inflow of $2.4bn.

The government expects to receive about $28bn remittances during the current financial year while it had received $23bn in FY20, which was historically high and recorded a growth of 6.4pc compared to the previous year.

Over $16.4bn received since July 2020 as govt expects inflow of $28bn this year

This sustained increase in workers’ remittances largely reflects growing use of banking channel that is attributed to continuous efforts by the government and SBP to attract inflows through official channel, limited cross-border travel amid the second wave of Covid-19 and flexible exchange rate regime, according to the SBP statement issued on Monday.

However, market experts said remittances were growing also due to open policy of the government for free movement of dollars, as inflow and outflow have no restrictions.

Though the inflow has increased, the trend remained the same as higher remittances were received from the traditional destinations. Pakistan received the highest remittances of $4.508bn from Saudi Arabia with 21.7pc growth compared to 20pc increase in the same period of last fiscal FY20. The fear that Pakistanis would lose jobs in Saudi Arabia and other Arab countries depending largely on oil income has so far proved wrong.

The country received second highest remittances from the UAE amounting to $3.448bn during the seven months of the current fiscal; a growth of 6.4pc compared to 20pc rise in the same period of last fiscal.

However, the biggest increase was noted in the inflows from the US and the UK. The inflow from the US jumped by 45.8pc to $1.407bn compared to 50.6pc fall in the same period of last fiscal. Similarly, the inflow from the UK jumped by 51.5pc to 2.18bn compared to a steep decline of 51.5pc in the same period of last financial year. Both the countries helped to build an overall 24pc growth in remittances during the seven months of the current financial year.

Remittances from other GCC countries recorded a growth of 6.3pc as the remittances rose to $1.888bn during the current fiscal; the growth was 45pc in the same period of last fiscal.

The country’s growing foreign exchange need is being met with the remittances and borrowing from international donors or commercial banks. The export is yet to see a jump while its proceeds may remain below the remittances this year.

Published in Dawn, February 16th, 2021