KARACHI, April 15: The inflow of workers remittances or money sent back home by overseas Pakistanis in March this year fell to around $330 million from $356 million in March 2003.

And in nine months to March 2004, net workers remittances fell to $2.840 billion from $3.072 billion in a year-ago period. This means that the country saw a decline in workers remittances of 8.4 per cent in March this year and of 7.5pc in the first nine months of the current fiscal year.

Data released by the State Bank shows that workers remittances totalled $2.875 billion in July-March 2003-04, down from $3.101 billion in a year ago period. But net remittances in July-March 2003-04 stood at $2.840 billion still against $3.072 billion in July-March 2002-03.

Net remittances are arrived at after excluding the inflows of foreign exchange through encashment of and profits earned on foreign currency bearer certificates and foreign exchange bearer certificates.

At $2.84 billion workers remittances in nine months of this fiscal year are quite in line with the full fiscal year target of $3.6 billion. But the fact that the country can mobilize an even higher amount of remittances can hardly be over-emphasized because the pie of workers remittances is much larger - around $7-8 billion.

Economic managers seem satisfied with the pace of inflow of workers remittances and keep saying that the country would easily achieve the target of workers remittances set at $3.6 billion.

But they overlook the fact that in the past the State Bank was purchasing dollars from money changers and the amount of this dollar buying represented unofficial inflow of workers remittances.

During this fiscal year the central bank has not made such dollar buying. It is the foreign exchange companies that now purchase dollars from the money changers and sell them to banks if their buying is greater than the demand from their customers in the open market.

Bankers and officials of exchange companies admit that these companies are selling a very nominal amount of dollars to banks because the open market demand for the dollar has been on the rise.

In effect the total inflow of foreign exchange in the shape of official workers remittances plus the amount of dollars sold by the exchange companies has fallen substantially if compared with the official remittances plus the SBP dollar buying from money changers in the past.

The SBP data shows that workers remittances from the US fell to $886.6 million in nine months to March 2004 from $943 million in a year-ago period, showing a six per cent decline. Remittances from the UAE fell by a much bigger margin of 33 per cent to $447 million in July-March 2003-04 from $666 million in the same period of 2002-03.

But what is encouraging is that remittances from the US rose to $104.6 million in March 2004 alone from $86.4 million in March 2003. Bankers link this increase to boom in real estate prices in Pakistan that prompted many US-based Pakistanis to send more money back home for purchase of property.

The same could be said to justify the increase in the remittances from the UK, which rose to $28.2 million in March this year from $20.8 million in March last year. Also in nine months to March 2004, remittances from the UK shot up to $249.3 million from $197.4 million in a year-ago period.

Bankers say that remittances from the UK have been on the rise also because of the rising number of Pakistani students going there. The UK has relaxed rules allowing more space for overseas students to work legally while studying.

Some say that Pakistanis settled in the UK have started making sort of panic transfers back home, fearing closer scrutiny of their accounts in the current international political situation.

Remittances from Saudi Arabia also inched up to $424 million in nine months from $422.7 million in a year-ago period. But in March 2004 alone, remittances from that country fell to $47.4 million, down from $53.3 million in March 2003.