KARACHI, Feb 19: Home remittances or the money sent back home by overseas Pakistanis crossed the one billion dollar mark in the first seven months of this fiscal year.

The State Bank said on Tuesday that home remittances including encashment of foreign exchange and foreign currency bearer certificates as well as Haj remittances totalled $1.163 billion between July 2001-January 2002. The SBP said in a press release that in January 2002 alone Pakistan received $180.5 million home remittances up 79 per cent over the $100.7 million remittances received in January 2001.

The cumulative remittances of $1.163 billion in seven months to January 2002 is also higher by 63.8 per cent than the $709.9 million remittances received in seven months to January 2001.

Home remittances have been on the rise after tightening of anti-money laundering laws in the US and elsewhere in the wake of the September 11 attack on New York and Washington.

The remittances that are the second largest source of foreign exchange earning after exports have recorded an unusual increase chiefly due 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 rates had been more than Rs2 per dollar that gradually came down to few paisas by the end of January. Now the dollar is cheaper in the open market than in the inter-bank market. So chances of home remittance should rise further in the remaining months of this fiscal year. When the difference between the two rates was big overseas Pakistanis had to suffer a loss on sending money back home through legal channels. The narrowing down of the difference has lured many of them to remit money through banks rather than through Hundi.

Bankers say home remittances may reach near $2 billion during this fiscal year if the dollar remains cheaper in the open currency market—or trades at a few paisa premium—in the coming months. They also pin their hopes on the high-tech arrangement some state-run banks have made for handling home remittances.